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Highlights Medicaid States that have experimented with Medicaid “managed care” programs-widely viewed as one health care delivery approach that may yield dividends in patient access, quality of care, and cost savings-are reporting mixed results in achieving their objectives. Page 23.

C-17 Cargo Aircraft Although C-l 7 cost trends continue to deteriorate and delivery schedules continue to slip, the Air Force is such a strong advocate for the military transport being developed and produced by McDonneU Douglas Corp. that it appears to be unwilling or unable to objectively evaluate the program’s progress and shortcomings. Page 40.

Peanut Program

GAO/OPA-93-6

American consumers overpay hundreds of millions of dollars each year for peanuts because a federal program initiated during the Great Depression controls the U.S. peanut supply and guarantees producers a minimum price for their crops that substantially exceeds the world market price. Page 2.

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Annual Index Now Available

GAO'S Abstracts of Reports and Testimony: Fiscal Year 1992 (GAo/oIMG9%%) and an accompanying volume, Indexes for Abstracts of Reports and Testimony: Fiscal Year 19%! (GAO/OIMC-93-ZB),are nowavailablefor distribution. The two-volume set, which totals about 700 pages, can be obtained using the order form in the back of this publication.

Contents

Reports amd Testimony: March 1993

Agriculture an9 Food 2 Budget and Spending 5 Civil Rights 6 Economic Development 7 Education 8 Employment 10 Energy 10 Environmental Protection 11 Financial Institutions 13 Financial Management 15 Government Operations 16 Health 23 Income Security 27 Information Mariagement 29 International Affairs 31 Justice and Law Enforcement 34 National Defense 34 Natural Resources 41 Science, Space, and Technology 42 Tax Policy and Administration 43 Transportation 46 Veterans Affairs 51

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Reports and Testimony: March 1993

Agriculture and Food Peanut Program: Changes Are Needed to Make the Program Responsive to Market Forces

GAOIRCED-I)M, Feb. 8 (81 pages).

The U.S. Department of Agriculture’s (USDA) peanut program has been a steady source of income for farmers and has generally stabilized the U.S. peanut supply. Yet peanut farming, like much of U.S. agriculture, has undergone profound changes since the 1930s. Small farms have gradually been bought out and consolidated into large-scale operations. By 1991, about one-fourth of all producers controlled more than 80 percent of the peanut quota. Today, the small number of producers who hold most of the quota are reaping huge profits from the program. Because the yearly quota support price since 1982 has been well above production costs, quota peanut producers have received, on average, a 51-percent minimum net return after costs. The peanut program also benefits individuals who own farms with assigned quota but choose to sell or rent their quota to others, Economic studies and GAO'S analysis show that the peanut program adds from $314 million to $513 million each year to consumers’ costs of buying peanuts. At the same time, USDA spends tens of millions of dollars each year to run the peanut program, make mandatory payments to producers, and cover the high cost of peanut products it buys under various food assistance programs. Finally, the program, by boosting the volume of U.S. peanuts available for export, may be lowering prices paid for peanuts abroad. GAO summarized this report in testimony before Congress; see:

Peanut Program: Changes Are Needed to Make the Program Responsive to Market Forces, by John W. Harman, Director of Food and Agriculture Issues, before the Subcommittee on Specialty Crops and Natural Resources, House Committee on Agriculture. GAOIT-RCED-~~3-18, Mar. 10 (six pages).

USDA Research and Extension Agencies: Missions, Structures, and Budgets

GAO~ED~~+~, Feb. 18 (29 pages).

Congress is considering ways to restructure the U.S. Department of Agriculture (USDA) to boost efficiency and improve delivery of service. This fact sheet provides information on the following four USDA agencies: the Agricultural Research Service, the Cooperative State Research Service, the

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Extension Service, and the Soil Conservation Service. GAO discusses the agencies’ missions, programs, organizational structures, and staffing and funding for fiscal years 1987 through 1991.

Wheat Commodity Program: Despite Reforms, Government’s Involvement Remains Substantial

GAO/RCED9x?0, Mar. 18 (14 pages).

For more than 40 years, the federal government’s wheat commodity program has tried to reduce wheat price fluctuations while ensuring ample supplies for consumers. Because total returns for wheat were often above expected market returns, producers grew wheat to receive these benefits in addition to return from the commercial market. Congress passed legislation in 1985 and again in 1990 to gradually increase the influence of the commercial market on farmers’ production decisions and to reduce the level of government support for wheat production. Despite these reforms, the government’s involvement in managing surplus wheat remains substantial. Deficiency payments under the wheat program are above the 1982-85 levels, and the Conservation Reserve Program and the Export Enhancement Program have added costs averaging more than $800 million per year from 1986 to 1991. Because the government’s costs connected with wheat production are affected by external factors such as droughts and international wheat production and prices, it could be misleading to compare trends in the government’s overall costs from year to year. Over the long run, however, GAO would expect costs to be lower than they would have been under the 1981 farm bill.

Conservation Reserve Program: Cost-Effectiveness Is Uncertain

GAO/RcED-93-132, Mar. 26 (14 pages).

Under the Conservation Reserve Program, the Agriculture Department will spend nearly $20 billion between fiscal years 1987 and 2003 to temporarily remove 36.5 million acres of cropland from production. GAO concludes that the program is an expensive way to reduce environmental problems, such as erosion, linked to agriculture production. Little is known about the dollar value of the environmental benefits purchased or about the extent to which removing the land from production will alleviate environmental problems. Furthermore, the program postpones rather than resolves these problems, and additional costs may be incurred to maintain the program’s

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objectives when the contracts expire. Other Agriculture Department conservation initiatives use less costly strategies to achieve lasting environmental objectives; unlike the Conservation Reserve Program, however, these other programs are not intended to curb excess production, and they only indirectly support farmers’ incomes.

Testimony Crop Insurance: Federal Program Has Been Unable to Meet Objectives of 1980 Act, by John W . Harman, Director of Food and Agriculture Issues, before the Subcommittee on Rural Development, Agriculture and Related Agencies, House Committee on Appropriations. GAO/r-RCED-93-12, Mar. 3 (20 pages).

Congress significantly expanded the federal crop insurance program between 1981 and 1990, but it sustained more than $2.3 billion in underwriting losses for the period because farmers’ premiums were not actuarially sound. At the same time, growing private-sector involvement in the program has meant handsome profits for insurance companies-they earned underwriting gains of more than $100 million during the 198Os-with very little risk attached. Poor oversight over reinsured companies, particularly in the area of claims adjustments, has resulted in millions of dollars in overpayments. Finally, a major congressional objective-to make crop insurance the preeminent means of providing agricultural disaster assistance-has not been achieved. Other forms of agricultural disaster assistance represented 76 percent of all assistance during the 1980s. Several alternatives and variations to the current program have been proposed recently. In the final analysis, Congress will have to weigh the benefit of protecting farmers from hardship and the cost of this protection.

Food Safety: Building a Scientific, Risk-Based Meat and Poultry Inspection System, by John W . Harman, Director of Food and Agriculture Issues, before the Subcommittees on Livestock and Department Operations and Nutrition, House Committee on Agriculture. GAO/r-RCED-93-22, Mar. 16 (17 pages).

The existing meat and poultry inspection system relies on labor-intensive methods-primarily sight, smell, and touch-that cannot detect pathogenic bacteria, a major public health risk. This shortcoming was illustrated by the recent deaths and illnesses in Washington state linked to undercooked hamburgers contaminated with bacteria. To better protect the public from foodborne illnesses, the Food Safety and Inspection

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Service (FSIS) must move to a modern, scientific, risk-based inspection system. GAO recommends that the FSIS (1) develop a detailed strategic and operational plq showing how it plans to achieve a more effective inspection system, (2) work with all interested parties to build a consensus on the design of a new inspection system, and (3) seek needed legislative changes and obtain congressional guidance on the objectives of the meat and poultry industry.

U.S. Department of Agriculture: Improvements Needed in Market Promotion Program, by Allan I. Mendelowitz, Director of Financial Institutions and International Trade Issues, before the Subcommittee on Economic Policy, Trade and Environment, House Committee on Foreign Affairs. GAOm-GGD-93-17, Mar. 25 (29 pages).

The Market Promotion Program was created to encourage exports of U.S. agricultural products, particularly high-value products, such as fruits, nuts, and processed foods, as well as products that have been harmed by unfair foreign trade practices. From fiscal years 1986 through 1993, more than $1.25 billion was allocated for the program. This testimony addresses the historical development of the program and its management and operations. GAO makes several suggestions for improving the program.

Budget and Spending Balanced Budget Requirements: State Experiences and Implications for the Federal Government

GAohwhm93mm, Mar. 26 (48 pages).

Forty-eight of the 50 states have balanced budget requirements, but not all states balance their budget every year, even according to the relatively flexible state definitions of “balance.” Although many states have raised taxes and cut spending to live within their means, state balanced budget requirements do not appear to be the only motivators of these budget actions. Thus, relying on such a requirement alone to balance the federal budget may not necessarily achieve that goal.

Testimony Budget Process: Use and Impact of Rescission Procedures, by Milton J. Socolar, Special Assistant to the Comptroller General, before the Subcommittee on Legislation and National Security, House Committee on Government Operations. GAom-oCG-93-6, Mar. 10 (10 pages).

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Beporta and Testimony: March 1993

Congress should proceed cautiously in considering proposals for “enhanced rescission”-giving the President authority to rescind enacted budget authority unless expressly disapproved by Congress-because their effect would be to shift significant power to the executive branch in an area that the Constitution reserves for the legislature. Given the relatively small influence that rescissions can have on budgets and deficits of today’s magnitude, rescissions cannot be viewed as a major deficit reduction tool. Rather, they should be considered a way for the President and Congress to debate and resolve their differences on specific program cuts. Proposals to change the process, therefore, should take into account possible changes in the relative balance of power between the executive and legislative branches. Enhanced rescission authority would tip the scales toward the presidency. Expedited rescission authority would have a less dramatic effect, but current processes are sufficient, arguably, to ensure congressional consideration of any rescission proposals for which significant support exists in Congress.

Budget Policy: bong-Term Implications of the Deficit, by Charles A. Bowsher, Comptroller General of the United States, before the Senate Committee on Finance. GAOrr-oCG-93-6, Mar. 25 (I5 pages).

This testimony discusses the consequences of action-or inaction-to reduce the federal budget deficit. Several scenarios are explained, including ignoring the deficit, “muddling through” by holding the deficit to three percent of GNP, balancing the budget, and achieving a budget surplus. The Comptroller Generals central message is that, although putting the budget on a path toward balance or surplus will not be easy, delay will not eliminate the hard choices. Delay only guarantees that the choices will be even more difficult and the pain even greater when policy correction is finally made. The choice is not whether to act but when to act and how.

Civil Rights

Testimony Federal Employment: Sexual Harassment at the Department of Veterans Affairs, by Nancy Kingsbury, Director of Federal Human Resource Management Issues, before the House Committee on Veterans’ Affairs. GAOmGGD-93-12, Mar. 30 (1 I pages).

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l&ports and Testimony: March 1993

GAO recently began investigating factors that could discourage employees at VA medical centers from filing sexual harassment COmplaintS. The complaints GAO examined were handled under a decentralized system that vested responsibility for resolving them with the directors of VA’s 171 medical centers. Counseling and investigations were done by employees temporarily assigned to that job. GAO found that (1) one-third of the complaints were rejected on procedural grounds; (2) complaints that were accepted were not investigated promptly, requiring employees to continue working in the offrces where sexual harassment had allegedly taken place; (3) about half of the complainants believed that reprisals had been taken or threatened as a result of their complaints. GAO believes that the procedures used for complaint processing did not provide appropriate independence and oversight of complaint resolution. Although the new Secretary of Veterans Affairs is trying to resolve these problems, it will take time to assess the impact of his actions, and concerns persist about the timeliness of complaint resolution and the qualifications and availability of part-time counselors and investigators. GAO also testified on pending legislation that would further change VA'S procedures for dealing with sexual harassment cases.

Economic Development

Disaster Relief Fund: Actions Still Needed to Prevent Recurrence of Funding Shortfall

GAO/RCEB9%60, Feb. 3 (nine pages).

The fiscal year 1991 shortfall in the Federal Emergency Management Agency’s (FEMA) Disaster Relief Fund occurred essentially because (1) large expenses were paid from the fund during fiscal year 1991 as a result of disasters from previous years, such as the Loma Prieta earthquake and Hurricane Hugo, (2) no appropriation was made for fiscal year 1991, and (3) the enactment of the supplemental appropriation was delayed. Recent steps taken by Congress and FJNA should lessen the chances of another shortfall. For example, legislation enacted in 1991 stating #at supplemental appropriations for the Disaster Relief Fund will be considered as emergency funds should help to reduce the delay in making funds available. Also, FEMA is trying to develop more accurate and timely estimates of disaster costs. Although major disasters like Hurricane Andrew involve huge costs paid over many f=cal years, FEMA’S budget submission to Congress gives no idea how much of the balance of the Disaster Relief Fund at the start of the year will be needed to pay for

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disaster costs arising from previous years. Congress could use such information in considering the need for and the amount of appropriations.

Testimony Disaster Management: Recent Disasters Demonstrate the Need to Improve the Nation’s Response Strategy, by Judy A. England Joseph, Director of Housing and Community Development Issues, before the Subcommittee on Investigations and Oversight, House Committee on Public Works and Transportation. GAO/r-RCED-93-13, Mar. 2 (35 pages).

The federal government’s strategy for responding to catastrophes like Hurricane Andrew is deficient. It lacks plans for (1) comprehensively assessing damage and the needs of disaster victims or (2) delivering quick, responsive assistance. The federal government also does not have explicit authority to adequately prepare for a disaster when there is warning. Finally, state and local governments generally do not have the training and funding needed to respond on their own to disasters. In the case of Hurricane Andrew, shortcomings included inadequate damage assessments, inaccurate estimates of needed services, and miscommunication and confusion at all levels of government-all of which slowed the delivery of vital services to disaster areas. On the other hand, the military proved that it can respond very efficiently to the immediate needs of the disaster victims. GAO outlines several steps that the Federal Emergency Management Agency and Congress could take to strengthen the government’s response to natural disasters.

Education Compensatory Education: Difficulties in Measuring Comparability of Resources Within School Districts

GAOmD-9337, Mar. 11 (33 pages).

The Chapter 1 program, the backbone of federal elementary and secondary education efforts, gave states about $6.1 billion in fiscal year 1992 to deliver supplemental educational services to educationally disadvantaged students. These services were intended to help students attain grade-level proficiency and increase their achievement in basic and more advanced skills. The Chapter 1 comparability provision is a key program component. It seeks to ensure that school districts (1) continue to provide basic services to poor schools with large concentrations of Chapter l-eligible children and (2) use Chapter 1 funds only to supplement

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those basic services funded by nonfederal sources. The provision says that basic services must be comparable in poor and non-poor schools. This report assesses school district compliance with current comparability requirements and provides information on alternative ways to measure comparability.

Chapter 1 Accountability: Greater Focus on Program Goals Needed

GAO/HRD-93-69, Mar29(114pageS).

To ensure that individual schools are effective in helping Chapter 1 students improve their skills in such areas as reading, math, and language arts, Congress created a new accountability system that measures student achievement. Local education agencies are required to identify schools with ineffective Chapter 1 programs and work with them to develop program improvement plans. If results are not forthcoming, the state education agency must intervene, working with local officials to develop a joint improvement plan for the school. Local and state education officials and recent studies have raised questions about how accurately schools have been targeted for improvement. Recent studies have also raised concerns about schools’ local program improvement efforts, although no studies have focused on state and local efforts in the joint phase. This report (1) assesses the process used to identify schools needing program improvement and makes suggestions for improving the process and (2) compares implementation of the joint and local phases of program improvement, including the roles of school, district, and state staff, as well as the program changes (or strategies) schools use to bring about improvement.

Testimony Drug Education: Limited Progress in Program Evaluation, by Eleanor Chelimsky, Assistant Comptroller General for Program Evaluation and Methodology, before the Subcommittee on Select Education and Civil Rights, House Committee on Education and Labor. oAo~-PEMtx%z, Mar. 31 (10 pages).

This testimony provides updated information on the state of program evaluation in the field of drug education for youth. GAO discusses the role of evaluation in (1) the Department of Education’s program of grants to states and local school districts under the Drug-Free Schools and Communit ies Act of 1986; (2) the department’s Drug-Free School

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Recognition Program; and (3) other promising, comprehensive community-based programs. GAO found slow progress in establishing the results of sizable federal funding, or more generally, in learning what works in educating youth about the dangers of drug abuse.

Employment M ine Safety and Health: Tampering Scandal Led to Improved Sampling Devices

GAomm-93-63, Feb. 25 (18 pages).

The Mine Safety and Health Administration (MSHA) became aware of the need for tamper-resistant cassettes in its respirable coal dust control program in 1975 after coal mine operators tampered with required coal dust samples collected in their mines. The Bureau of Mines awarded a contract to develop a tamper-resistant cassette, but prototype testing in 1978 revealed problems, and the government’s interest in producing such a device waned. A cassette manufacturer privately developed a tamper-resistant cassette in 1991, and the Labor Department began requiring coal mine operators to use the new devices in 1992. MSHA considered tamper-resistant pumps for its program in the 1970s but never received enough funding to pursue development. In 1992, the same manufacturer that modified the cassette also produced a tamper-resistant pump that MSHA bought for its inspectors to use when taking coal dust samples. MSHA began using the pumps in January 1993 but does not plan to require coal mine operators to buy and use them immediately. According to MSHA, the mine operators will buy the improved pumps as they replace those now in use because only the tamper-resistant pumps are now being produced. Over the years, research has been done on alternative monitoring devices to improve the collection and measurement of respirable coal dust samples-mainly fixed-site, continuous monitoring systems. So far, however, these efforts have been unsuccessful, and MSHA offkials believe that such technology is years away.

Energy Nuclear Waste: Hanford Tank Waste Program Needs Cost, Schedule, and Management Changes

GAoifmD-93-99, Mar. 8 (48 pages).

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The Department of Energy (DOE) has been trying to clean up the radioactive waste at its Hanford Site in Washington state by encasing it in glass-a process known as vitrification-and shipping it to a geologic repository for permanent disposal. Major technical problems have beset all key steps of the program. Specifically, DOE has not determined how many samples it will ultimately need to determine the contents of the waste and lacks adequate facilities for analyzing the material. DOE has not fully tested its approach for retrieving different wastes to be treated and is basing its pretreatment plans on unproven technology. Even if DOE surmounts these obstacles, the vitrification plant may not be large enough to treat all of the high-level waste in a reasonable time frame and the technical feasibility of DOE'S approach to disposing of low-level waste has yet to be demonstrated. In addition to these technical uncertainties, questions have also been raised about the program’s cost, schedule, and management. For example, estimates for completing the project have soared Corn $14 billion to nearly $50 billion.

Energy Security and Policy: Analysis of the Pricing of Crude Oil and Petroleum Products

GAOmED9Sl'I, Mar. 19 (132 pages).

During the first week following the Iraqi invasion of Kuwait in August 1990, crude oil prices in the United States shot up by more than one-third-from about $22 a barrel to about $30 a barrel. The prices of gasoline, home heating oil, and jet fuel also increased substantially. Yet world inventories of crude oil were at their highest level since the late 1970s. This situation raised questions about how prices for crude oil and petroleum products are set, particularly during market shocks. This report (1) explains the pricing of crude oil and three products refined from it-gasoline, home heating oil, and jet fuel-under normal market conditions and during market shocks and (2) describes the federal government’s authority to respond to disruptions in the oil supply and the government’s use of this authority during the Persian Gulf war.

Environmental Protection

Hazardous Waste: Much Work Remains to Accelerate Facility Cleanups

GAOmCED93-15, Jan.19(71 pages).

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The Environmental Protection Agency (EPA) can force businesses with hazardous waste operations to clean up waste that has contaminated the environment. About 3,400 facilities are suspected of leaking dangerous material, but, as of June 1992, only 43 had implemented comprehensive cleanup measures. This report examines (1) the status of EPA’s corrective action process and (2) the funding that has been made available for the corrective action program and the usefulness of the data used to determine overall costs.

Environmental Protection: Implications of Using Pollution Taxes to Supplement Regulation

GAOIRCED-9Sl3, Feb. 17 (54 pages).

Pollution taxes would have to be carefully designed and implemented if they are to deliver the intended environmental and economic benefits. An accurate monitoring system would be needed to ensure that the tax was reducing pollution. Accurate monitoring technology exists for some smokestack emissions, but in other cases, such as those involving fugitive emissions of dust, monitoring could be very difficult. It would also be important to ensure that the tax led to an overall reduction of environmental risks. The regulator would need to be aware that taxing one pollutant might increase the use of other pollutants that are equally toxic. For example, a tax on lead alone could boost the use of cadmium in batteries. In addition, the tax rate that would be needed to reduce pollution to acceptable levels might not always be known. As a result, taxes might need to be introduced graduaJly and their effects monitored to determine whether pollution was being reduced to acceptable levels. The value of pollution taxes will depend on how well these issues are addressed. Pollution-tax revenues could be used to lower federal taxes that discourage economic growth or to reduce the federal budget deficit.

Testimony Management Issues Facing the Environmental Protection Agency, by Richard L. Hembra, Director of Environmental Protection Issues, before the Subcommittees on Legislation and Natural Security and the Environment, Energy, and Natural Resources, House Committee on Government Operations. GAOm-RCED-93-26, Mar. 29 (17 pages).

This testimony focuses on management problems outlined in GAO'S December 1992 transition-series report on environmental protection issues (GAO/OCG-93-16~~). The challenges confronting the Environmental Protection



Agency (EPA)- resource constraints, information gaps, insufficient corrective action, and the increasingly global nature of environmental problems-are formidable. Regardless of whether EPA becomes a Cabinet-level department, it will have to realize greater efficiencies and effectiveness with the resources it already has. It must develop adequate and accurate information to support its regulatory programs and measure environmental results, and it must establish clear accountability for correcting existing program weaknesses. EPA needs to work with Congress to give these issues the sustained effort and attention that are essential to their resolution.

Environmental Protection: EPA'S Actions to Improve Longstanding Information Management Weaknesses, by JayEtta Z. Hecker, Director of Resources, Community, and Economic Development Information Systems Issues, before the Subcommittees on National Security and on the Environment, Energy, and Natural Resources, House Committee on Government Operations. GAOrr-IMTEC-93-4, Mar. 29 (13 pages).

Gaps in scientific and monitoring information have called into question the soundness of the Environmental Protection Agency’s (EPA) regulatory decisions. Much of the agency’s information consists of activity-based indicators that do not directly measure either program success or environmental results. This testimony (1) discusses specific information resources management shortcomings at EPA and how they undermine program effectiveness, (2) outlines recent EPA responses to longstanding information management problems, and (3) examines factors that may decide EPA'S success in overcoming its information management challenges.

Financial Institutions Government-Sponsored Enterprises: Changes in Securities Distribution Process and Use of Derivative Products

GAO/GGI?-9MoBR, Mar 16(66pageS).

During the past year, agreements between government-sponsored enterprises (GSE) and selling group dealers were revised to ensure accurate reporting and improve allocation procedures by clarifying responsibilities and improving communications. For example, the distribution of securities are now subject to audit by the GSES, independent auditors, and internal auditors. In addition, securities are now generally

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allocated among selling group dealers on the basis of customer orders rather than the past practice of using historical performance by the dealers. These revised agreements should improve the integrity of the GSE securities market. Like many other investments, GSE derivative products have complex risk characteristics, including volatile yields and prices, that may make them unsuitable for some investors. Also, investors who buy these derivatives from dealers regulated by the National Association of Securities Dealers (NASD) may not be protected from sales practice abuses because NASD cannot apply most sales practice rules to the government securities activities of the dealers it examines. GAO continues to support allowing NASD to examine the sales practices of dealers’ selling government securities, including GSE derivative securities.

Testimony Bank and Thrift Regulation: Concerns About Credit Availability and Regulatory Burden, by Charles A. Bowsher, Comptroller General of the United States, before the Subcommittee on Commerce, Consumer, and Monetary Affairs, House Committee on Government Operations. GAOrr-GGD-9Si0, Mar. 17 (10 pages).

The Comptroller General makes four main points about the landmark FDIC Improvement Act. F’irst, although it is true that the legislation increases the amount of regulation, the act’s key safety and soundness reforms are critical to preventing further losses to the insurance funds and to taxpayers. Second, access to bank credit is essential to the viability of small and medium-sized businesses, the main source of new jobs in the United States. Consequently, steps should be taken to streamline the paperwork burden and regulations that may be unnecessarily hindering some kinds of business loans. Third, some of the regulatory burden placed on banks can be eased by eliminating the inconsistency and duplication associated with bank examinations. Fourth, before Congress passes any legislative remedies, it needs sound analyses to determine whether the root causes of unnecessary burden are in the statutes, the implementing regulations, the behavior of the regulators, or some combination of factors. On a related matter, GAO applauds the general direction of the President’s recently announced regulatory initiative directed at problems of credit availability. This testimony also discusses two GAO studies under way-one on small business lending and the other on regulatory burden.


BeportsandTestimony:March1993

Resolution ‘Trust Corporation: Funding, Organization, and Performance, by Charles A Bowsher, Comptroller General of the United States, before the Subcommittee on Financial Institutions Supervision, Regulation and Deposit Insurance, House Committee on Banking, Finance and Urban Affairs.GAOfr-GG~-9%13,bbr. IS(32 pages).

At the end of 1992, the Resolution Trust Corporation had disposed of assets with a book value of about $330 billion or about 75 percent of the assets that have come under its control. RTC should be provided with the funds needed to resolve thrifts that already have failed and those likely to fail soon; delay only serves to boost the final tab for resolving the thrift crisis. RTC needs to make progress in several key areas, however, to ensure that taxpayers’ costs are minimized. RTC needs to collect, assess, and fully use the basic business information that would allow it to better manage its inventory and ensure that its asset disposition strategies are maximizing recoveries. This is especially vital as RTC uses innovative approaches to dispose of assets, particularly its large volume of hard-to-sell assets. RTC also needs to correct long-standing weaknesses in its contracting system. RTC still does not appreciate the central role that a sound contracting system has in meeting its mission. The continuing problems at HomeFed Savings Bank in San Diego, California, are only the most recent instance of the poor planning, management, and oversight that have plagued RTC from the start. Contracting deficiencies have cost-and continue to cost-taxpayers millions of dollars.

financial Management

Financial Audit: Guaranteed Student Loan Program’s Internal Controls and Structure Need Improvement

GAOMFMD-9320, Mar. 16 (64 pages).

Under the Guaranteed Student Loan Program, the Department of Education guaranteed about $14.6 billion in student loans in fiscal year 1992 and paid about $5 billion in default claims and interest subsidies. Because of a history of inadequate program oversight and management, GAO has included the program in its list of 17 “high-risk” areas vulnerable to waste, fraud, and abuse. Material weaknesses impede the Department’s ability to obtain accurate and reliable data on the Guaranteed Student Loan Program. These weaknesses include inadequate oversight of guaranty agencies and lenders and weaknesses in the Department’s controls to ensure the accuracy of its financial and other program data. As a result, the Department cannot be certain that billions of dollars paid

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annually to guaranty agencies and lenders were proper or that financial information on program operations was accurate. Serious problems also affect the program’s structure. Guaranty agencies assume little financial risk and are not compensated in a way that provides enough incentives to prevent defaults. In addition to their guarantor role, they are allowed to be both loan servicers and secondary market operators, which can create conflicts of interest. By assuming servicing and ownership roles, guaranty agencies are, in effect, responsible for regulating their own activities. The Department had some corrective actions under way that should increase program accountability. Some weaknesses, however, cannot be fully resolved until the role of guaranty agencies is addressed. Effective corrective actions will require new systems, revised regulations, or legislation and thus extend over several years.

Financial Management: Navy Industrial Fund Has Not Recovered Costs

GAOLWMD-93-18, Mar. 23 (29 pages).

The Navy industrial fund provides such services as depot maintenance for ships and aircraft, as well as transportation for its customers, which include military groups, civilian agencies, and foreign governments. For fiscal years 1989 through 1991, the Navy industrial fund activities reported sales of nearly $50 billion. Although some of the fund’s activities earned profits, the fund reported overall net operating losses of more than $794 million during this period. The aviation depots and shipyards incurred most of these losses. This report (1) determines why the Navy industrial fund incurred these losses and (2) assesses the appropriateness of fLscal year 1993 pricing practices.

Government Operations

Census Reform: Early Outreach and Decisions Needed on Race and Ethnic Questions

G~o/GG~43-36, Jan. 28 (32 pages).

Race and ethnic questions are among the most technically complex and publicly controversial questions asked on the decennial census. The resulting data are used for a variety of important policy ends-everything from promoting fair voting practices to analyzing the health of different population groups in the United States. This report provides information

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EeportsandTe&imony:March1993

on (1) the development of race and ethnic questions on the most recent decennial census in 1990, (2) the quality of race and ethnic data from the decennial census, and (3) the Census Bureau’s progress in developing questions for the upcoming census in the year 2009.

GSA Procurement: Public Utilities’ Plans for Small and Small Disadvantaged Subcontractors

GAO/GGD93-44, Jan29(22pageS).

The law requires that federal contracts exceeding $500,000 include subcontracting plans that maximiz e opportunities for small businesses, especially those owned and managed by socially and economically disadvantaged individuals. GAO reported in 1989 that several utilities providing services to the federal government declined to sign formal contracts because they objected to the statutory requirements for subcontracting plans. In most instances, federal agencies had no choice but to accept and pay for these utility services without a contract because alternative sources were unavailable. This report provides updated information on the number of utilities that supply service to the General Services Administration (GSA), how many utilities had entered into contracts with GSA, and how many had submitted subcontracting plans.

Paperwork Reduction: Agency Responses to Recent Court Decisions

GAO/PEMD-93-5, Feb. 3 (23 pages).

Federal agencies are constantly collecting, analyzing, and disseminating information from individuals, businesses, and other levels of governments. The Paperwork Reduction Act of 1980 seeks to minimize the paperwork burden on the public while m aximizing the usefulness of the information collected by the government. The law gives the Office of Management and Budget (OMB) approval authority for the collection of information by federal agencies. This report examines how recent court cases-especially Dole v. United Steelworkers of America-have affected the paperwork clearance process. GAO discusses (1) what guidance, if any, agencies have received and what criteria they use to decide whether an information collection request falls under the Steelworkers decision; (2) how broadly the agencies have interpreted the court cases; and (3) what changes the

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agencies have made in the number and type of information collection requests they send to OMB for approval.

Whistleblower Protection: Agencies’ Implementation of the Whistleblower Statutes Has Been M ixed

GAoiGGD93-66, Mar. 5 (15 pages).

In its review of 19 federal agencies, GAO found patchwork implementation of the whistleblower statutes designed to protect government workers who report waste, fraud, and abuse. Some agencies had informed all of their employees of their whistleblower rights, while others had yet to inform any. Most agencies had not developed policies and procedures to implement the statutes. GAO believes that, if employees had adequate knowledge about the whistleblower statutes and understood the federal government’s policy toward whistleblowing-one of encouraging disclosures and affording protection from reprisals-more employees might be willing to step forward to report problems. GAO also discovered that the statutes do not currently protect all federal employees against reprisals. The 19 agencies had mixed views on the effectiveness of the Whistleblower Protection Act of 1989. GAO summarized this report, along with other recent work on this subject, in testimony before Congress. GAO concludes that employees are still having a hard time proving cases of reprisal and are often unaware of their right to protection; see:

Whistleblower Protection: Employees’ Awareness and Impact of the Whistleblower Protection Act of 1989, by Nancy R. Kingsbury, Director of Federal Human Resource Management Issues, before the Subcommittee on the Civil Service, House Committee on Post Office and Civil Service. GAorr-ciGD9Sl9, Mar. 31 (seven pages).

Gross Domestic Product: No Evidence of Manipulation in First Quarter 1991 Estimates

GAO/GGD93-68, Mar. 10 (66 pages).

Press reports alleged that the Department of Commerce inflated the first quarter 1991 gross domestic product (GDP) to mask the true dimensions of the economic downturn. GAO, however, found no evidence that the Bureau of Economic Analysis manipulated first quarter 1991 personal income or GDP for political purposes. GAO does make several suggestions for


lZeportaaudTestimonyzMarch1993

improving the perceived integrity of the Bureau’s data. For example, GAO believes that the Bureau could more completely document and explain its data. Additionally, the Bureau has issued no public response to the press allegations. To determine user needs and to assure Congress and the public of the integrity and credibility of its data, the Bureau also needs to increase outside expert review and comment on its procedures. Congress may want to request that the Bureau testify regularly when it releases major national economic statistics.

l-Dollar Coin: Reintroduction Could Save M illions if Properly Managed

GAO/GGlx%56, Mar. 11 (36 pages).

Australia, Canada, Japan, and the major Western European countries all now use a coin for monetary transactions at, or above, the level for which Americans use the paper dollar. The Susan B. Anthony $1 coin, introduced in the United States in 1979, was rejected by the public. In light of recent proposed legislation that would reintroduce a $1 coin in the United States, GAO examined Canada’s experience. In GAO'S view, public resistance to converting to a coin dollar could be minor and short-lived and could be properly managed, as it was in Canada GAO also believes that, in a period of difficult and unpopular deficit reduction measures, the prospect of obtaining nearly $400 million in annual budget savings through updating the nation’s coinage is likely to be a relatively painless sacrifice for most Americans.

The Public Service: Issues Confronting the Federal Civilian Workforce

GAo/GGD-9Mx3, Mar. 16 (58 pages).

The federal government will spend about $150 billion on pay and benefits for civilian employees in 1993. The effectiveness and efficiency with which federal agencies carry out programs depends largely on the quality, motivation, and performance of these workers. Thus, the recruitment, hiring, training, management, and accountability of federal employees is critical to effective government. GAO issued 67 reports and 22 testimonies on federal public service during 1991. This report summarizes each of these documents, discusses agency responses to GAO'S recommendations on everything from lobbying reform to health club memberships for

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federal workers, and examines key areas in which further action or monitoring is needed.

UNESCO: Improvements in Management Practices

GAomsm-wim, Mar. 23 (10 pages).

The United Nations Educational, Scientific, and Cultural Organization (UNESCO) has acted on eight of 12 recommendations GAO made in a June 1992 report on UNESCO management, particularly in the areas of evaluation, human resource management, and budget presentation. Beyond GAO’S recommendations, UNESCO has (1) made evaluation an element of each professional’s performance rating, (2) separated staff because their positions were no longer needed, and (3) improved its budget presentation. GAO has some concerns about UNESCO’S oversight of the Participation Program, which funds projects and grants on a cost-sharing basis with individual member states. Overall, UNESCO’S member states, Director General, managers, and employee associations have shown a commitment to management reform. This commitment will need to continue for the long term if UNESCO is to fully implement GAO’S recommendations and solidify its recent management improvements.

District’s Workforce: Annual Report Required by the District of Columbia Retirement Reform Act

GAOIGGD-93-81, Mar. 31 (Six pages).

The federal government makes annual payments to the District of Columbia retirement fund for police officers and fire fighters. To encourage the District government to control disability retirement costs, these payments must be reduced when the disability retirement rate exceeds a certain limit. GAO concludes that no reduction is required in the fiscal year 1994 federal payment to the fund.

Testimony Decennial Census: Fundamental Reform Jeopardized by Lack of Progress, by W illiam M . Hunt, Director of Federal Management Issues, before the Subcommittee on Census, Statistics, and Postal Personnel, House Committee on Post Office and Civil Service. GAO/r-GGD-93-6, Mar. 2 (10 pages).

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This testimony focuses on some of the major Census Bureau programs: planning for the 2000 Decennial Census and the Economic and Agriculture Censuses. In GAO'S view, progress in redesigning the 2000 census has slowed to the point of jeopardizing fundamental census reform. Both the Economic and Agriculture censuses are going according to plan.

Federal Employment: Impact of President’s Economic Plan on Federal Employees’ Pay and Benefits, by Nancy Kingsbury, Director of Federal Human Resource Management Issues, before the Subcommittee on Compensation and Employee Benefit& House Committee on Post Office and Civil Service. GAOR-GGD-93-8, Mar. 10 (eight pages).

The President’s plan to spur economic growth and curb the deficit includes proposals to freeze federal pay in 1994, reduce pay increases in the following three years, defer locality pay, and trim retirement benefits. Although GAO strongly supports cutting the budget deficit and realigning spending and taxing priorities, GAO is concerned about the government’s ability to attract and retain highquality workers. Past GAO work has clearly shown that, because the best and the brightest often shun federal employment, agency work has suffered. Pay reform is, in GAO'S view, central to resolving this problem. The President’s plan negates much of the recent progress made in federal pay reform; indeed, in the short run, these proposals will exacerbate the situation. Confronting the nation’s economic and other ills, however, is an urgent priority that everyone-including federal workers-should support. To that end, federal employees may have to make more sacrifices like the temporary pay limitations proposed by the President. At the same time, GAO remains convinced that federal employees face enormous challenges in the years ahead and their compensation should be competitive with their counterparts in the private sector if an effective work force is to be maintained.

Irmrovim Government: Need to Reexamine Organization and Performance, by Charles A. Bowsher, Comptroier General of the United States, before the Senate Committee on Governmental Affairs. GAO/r-GGB93-9, Mar. 11 (22 pages).

Prompt action on performance measurement legislation, continued implementation of the 1990 Chief Financial Officers Act, and action on open GAO and inspectors general audit recommendations could constitute an important and immediate downpayment to the American taxpayers, showing that Congress and the administration are serious about improving government management. A commission to improve management in the


ReportsandTestimony:Marcb1993

federal government could play a valuable role in this effort. Most federal managers want to be efficient. When they run inefficient operations, it is usually because something forces them to do so or because strong incentives exist to do so or because they do not know how to fix it. The problem is the system, not the people in it. GAO cautions, however, that a commission is not a substitute for the steps already mentioned.

Federal Organizations: Structure and Oversight of Operational Boards and Commissions, by Nancy R. Kingsbury, Director of Federal Human Resource Management Issues, before the Subcommittee on Census, Statistics and Postal Personnel, House Committee on Post Office and Civil Service.GAOfr-GGD-9S-11, Mar.l6(17pageS).

This testimony discusses GAO'S work on the structure and oversight of operational boards and commissions. GAO (1) discusses which existing boards and commissions have an operational rather than advisory function, (2) analyzes the legislation and other documents relating to selected commissions to determine the framework for commission operations and for ensuring proper management, and (3) identifies factors that Congress might want to consider in crafting future legislation establishing new boards and commissions.

Improving Government: Measuring Performance and Acting on Proposals for Change, by Charles A. Bowsher, Comptroller General of the United States, before the Subcommittee on Legislation and National Security, House Committee on Government Operations. GAO/r-GGB9%14, Mar. 23 (20 pages).

In GAO'S view, the Government Performance and Results Act of 199ZLH.R. 826-could serve as the foundation for a broad range of efforts to improve federal management. This proposed legislation would require a group of pilot agencies to develop strategic plans, set agreed-upon goals, and measure their progress toward those goals. It also would provide greater managerial flexibility to some of these agencies through waivers of some administrative rules. Eventually, the bill calls for pilot tests to assess the feasibility of performance budgeting. Congress may also wish to consider a variety of legislative mechanisms, such as “fast track” approval; presidential reorganization authority; or a broadbased, bipartisan commission to implement reforms.

Postal Service: Restructuring, Automation, and Ratemaking, by Michael E. Motley, Associate Director for Government Business Operations Issues,

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Reporta and Testhnony: March 1993

Health

before the House Committee on Post Office and Civil Service. GAOmGGD92-16, Mar. 25 (19 pages).

In a 1992 top-down restructuring, the Postal Service sought to slash 30,OO overhead positions not directly involved in mail processing and delivery. Concerns have been raised that this move could harm mail service, particularly during the Christmas/Hanukkah holiday season. This testimony discusses (1) how the restructuring actually went, (2) efforts to automate mail processing, and (3) the need to reform ratemaking policies and processes.

District of Columbia: The Federal Payment Formula, by John W . Hill, Jr., Director of Audit Support and Analysis, before the Subcommittees on Judiciary and Education and on Fiscal Affairs and Health, House Committee on the District of Columbia. GAofl-mn-93-3, Mar. 31(12 pages).

This testimony on the yearly federal payment to the District of Columbia provides background on applicable laws, discusses GAO’S role in the process, and summarizes major events affecting this issue over the last year. The District’s appropriation request for the federal payment for fiscal year 1994 will be $671,566,000. The calculations used to arrive at this figure, however, are inconsistent with recent instructions from Congress. If applied as directed, the formula would have resulted in a federal payment of $632,685,000-a shortfall for the District of more than $33 million. The major difference between the base for local revenues used by the District and the one required by Congress is that the District’s base includes all revenues-general, enterprise, and trust funds-attributable to local sources and the required base includes only general fund and lottery transfers to the General Fund, adjusted for certain charges for services and miscellaneous revenue.

Medicaid: States Turn to Managed Care to Improve Access and Control Costs

GAOmRD93-46, Mar. 17 (100 pages).

Rising enrollment and spiraling costs are straining severely the government’s main health care program for the poor. Although Medicaid was intended to make health care more accessible to the poor, program beneficiaries today often cannot find doctors willing to treat them. Nearly all states are trying to establish managed care programs, which rely on the

Page 23 GMA’OPA-93-6


primary care physician to provide, or arrange for, health care in a cost-conscious way. GAO surveyed Medicaid offices across the country and did detailed work in the following six states: Arizona, Kentucky, Michigan, Minnesota, New York, and Oregon. Managed care has the potential for improved access and quality, but questions persist about whether Medicaid beneficiaries actually achieve better outcomes under this system. Certain measures of access-such as office wait tunes and emergency room use-show improvements under managed care, and the quality of care provided to beneficiaries generally matches that of traditional Medicaid fee-for-service care. But better measures of medical outcomes still need to be developed and refined before the question of quality can be answered with any certainty. Finally, states report significant cost savings compared to fee-for-service programs, although some experts dispute these claims. Given the direction that states have chosen, their current challenge is to establish comprehensive data collection and monitoring systems to oversee their program. Safeguards need to be in place to identify health care providers who may be taking excessive financial risks and reduce needed services to beneficiaries. GAO summarized this report in testimony before Congress; see:

Medicaid: States Turn to Managed Care to Improve Access and Control Costs, by Janet L. Shikles, Director of Health Financing and Policy Issues, before the Subcommittee on Oversight and Investigations, House Committee on Energy and Commerce. GAom-HRLb93-10, Mar. 17 (14 pages).

Medicaid: Outpatient Drug Costs and Reimbursements for Selected Pharmacies in Illinois and Maryland

GAOLHRD-~SMFS, Mar. 18 (17 pages).

This fact sheet looks at the extent to which ph armacies that buy outpatient drugs at a discount from drug manufacturers pass on any of the savings to state Medicaid programs. GAO compares drug purchase costs and Medicaid reimbursements in two states-Illinois and Maryland-chosen because each (1) uses one of two basic formulas to reimburse ph armacies’ drug purchase costs and (2) have relatively high expenditures for outpatient drug prescriptions. For each state, GAO compares the prices that hospital outpatient and nursing home pharmacies paid for specific outpatient drugs to the Medicaid reimbursements the pharmacies received. GAO also compares the prices the pharmacies paid to the drugs’ average wholesale

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Reporta and Testimony: March 1993

prices-the price manufacturers would pay if they did not receive discounts.

Medicaid: The Texas Disproportionate Share Program Favors Public Hospitals

GAOIHRLI-9386, Mar. 30 (42 pages).

Congress established the Medicaid disproportionate share hospital program in 1981 to cover additional Medicaid payments to hospitals serving large numbers of Medicaid and other low-income patients. These hospitals can face large financial burdens because Medicaid often reimburses less than other insurers and because some low-income patients do not qualify for Medicaid. Texas uses a unique formula to identify eligible hospitals and to calculate each hospital’s additional Medicaid payment. This report assesses the formula Texas uses and its effect on hospitals qualifying for program funds. GAO also describes how other states measure the amount of care their hospitals provide to all of their low-income patients and how they collect and validate hospital data.

Health Care: Rochester’s Community Approach Yields Better Access, Lower Costs

GAOmRD93-44, Jan. 29 (27 pages).

Rochester, New York, has succeeded in keeping health care costs lower than costs in other communities without sacrificing its residents’ access to care. Health insurance costs per employee in Rochester were 33 percent lower than comparable costs in the nation, and Rochester residents were more likely to have health insurance. Relative to the general U.S. population, people in Rochester seem happier with their health care system and say that they have an easier time obtaining care. Recently, only five percent of Rochester residents-compared with 13 percent nationally-said that they had gone without needed care in the last year. These results are due to the interaction of several factors, beginning with a long history of community-based health planning. Local initiatives have limited the expansion of hospital capacity, controlled the diffusion of medical technology, and maintained the practice of community rating of health insurance. All of these efforts have benefited from the active support of Rochester’s employers, who have worked with insurers, health



providers, and government to control health care costs and improve access to care. The Rochester experience provides important insights for other communities trying to gain control over rising health care costs and diminished access. In must be noted, however, that Rochester’s successes have resulted from decades of effort. Further, many of the problems that Rochester has avoided, such as the excessive growth of hospital beds and the erosion of health insurance coverage, are entrenched elsewhere. It may be more difficult to change practices that people are accustomed to than it is to prevent them from taking hold in the first place.

Needle Exchange Programs: Research Suggests Promise as an AIDS Prevention Strategy

GAOmRD93-60, Mar. 23 (33 pages).

Do needle exchange programs slow the spread of the AIDS virus by reducing needle sharing among addicts? GAO identified nine needle exchange projects that had published results. Of the three studies with findings based on strong evidence, two reported a reduction in needle sharing while the third reported an increase. Seven of the nine projects looked at whether these programs increased drug use. All five projects with strong evidence found that drug use did not increase among users; four reported no rise in the frequency of injection and one found no increase in the prevalence of use. GAO also found the forecasting model developed at Yale University to be credible. This model established a 33percent reduction in new HIV infections among New Haven, Connecticut, needle exchange program participants during one year. Although these findings suggest that needle exchange programs may hold promise as an AIDS prevention strategy, the law now blocks the Department of Health and Human Services (HHS) from using funds to directly support needle exchange programs. HHS does, however, have the authority to conduct demonstration and research projects that could provide needles to drug users.

Testimony Health Insurance: Remedies Needed to Reduce Losses Prom Fraud and Abuse, by Janet L. Shikles, Director of Health Financing and Policy Issues, before the Subcommittee on Health, House Committee on Ways and Means. GAOtT-HRD-93-8, Mar. 8 (10 pages).

Health insurance experts estimate that fraud and abuse contribute to about 10 percent of the nation’s $800-plus billion health care bill. Yet only



a fraction of this fraud and abuse is ever identified and prosecuted. W ithout adequate resources, investigation and pursuit of much of the health care fraud is impossible. A shortage of staff and money dedicated to pursuing fraud and abuse has allowed dishonest providers to stay in business. More resources alone, however, will not overcome fraud and abuse in the health insurance industry. GAO believes that the efforts of independent private payers, public payers, and state insurance and licensing agencies as well as state and federal law enforcement agencies need to be better coordinated. This would help overcome the systemic obstacles that hamper efforts to address health care fraud.

Income Security Social Security: Telephone Busy Signal Rates at Local SSA Field Offices

GAomRLm-49, Mar. 4 (36 pages).

The Social Security Administration (SSA), seeking to improve telephone service for the public, instituted a nationwide, toll-free 800 number for its field offices in 1988. GAO'S calls to local Social Security offices were often met with busy signals. Being disconnected or being transferred to answering machines were also problems, resulting in GAO being unable to complete 56 percent of the calls it placed. To provide a complete picture of the public’s ability to telephone SSA during this period, GAO also obtained busy signal data for SSA'S nationwide 800 number. That number had an overall busy rate of about 25 percent. SSA does not maintain data that would allow GAO to develop a comparable call completion rate.

Social Security: IRS Tax Identity Data Can Help Improve SSA Earnings Records

GAOmRE-93-42, Mar.29(19pageS).

Each year, millions of workers pay social security taxes on earnings that cannot be credited to their social security accounts because the Social Security Administration (SSA) does not ikze enough information to identify the correct accounts for these earnings. As a result, workers may end up shortchanged years later when they begin receiving social security benefits. Through routine tax administration activities, the Internal Revenue Service (IRS) obtains taxpayer identity data that could help SSA resolve uncredited earnings recorded in its suspense file. In GAO'S view, this information, which IRS requires as a condition for paying tax refunds,


ReportsandTeetSmony:March1993

could greatly benefit SSA resolution efforts. IRS reports show that in 1989 more than 776,000 taxpayers responded to its requests about the identity question to obtain a release of their tax refunds. IRS does not, however, keep the tsxpayer responses, and GAO was unable to estimate the potential suspense file resolution value to SsA. Spouse names from some joint tax returns would also help SSA credit earnings to workers’ accounts. IRS data could be helpful when SSA'S crediting problems relate to unreported changes in surnames. W ith this data, SSA could resolve an estimated 79,000 uncredited earnings cases valued at $556 million for tax year 1989 alone.

Income Security: Reports Issued During 1990-92 and Testimonies Delivered in 1992

GAomRD-98-80, Mar. 1993 (46 pages).

The nation spends $500 billion a year on income security programs, such as social security, disability, and welfare, accounting for more than 60 percent of the domestic budget. In addition, tax expenditures of upwards of $48 billion-the largest in the federal budget-for tax-deferred pension contributions underscore the key role of pensions and retiree health costs in income security policy. This publication contains summaries of recent GA0 reports on income security issues as well as titles of reports issued from 1990 to 1992 and testimony delivered in 1992. An order form is included.

Testimony Social Security: SSA'S Processing of Continuing Disability Reviews, by Jane L. Ross, Associate Director for Income Security Issues, before the House Select COmmittee on Aging. GAOmHRD-93-9, Mar. 9 (nine pages).

Growing financial and administrative problems have plagued the Social Security Administration’s (SSA) disability programs in recent years. In fiscal year 1992, applications for disability benefits reached an all-time high, as did the time it took SSA to process them. To keep up with the surge in claims, SSA has shifted resources from its continuing disability reviews, which ensure that people receiving government disability benefits are still eligible. GAO remains concerned that SSA has not been doing all the continuing disability reviews required by law. Although SSA is developing ways to better target continuing disability reviews to make more efficient use of its resources, many individuals who are no longer disabled will continue to receive benefits for years to come unless more continuing disability reviews are done. Even in the current environment of large

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ReportsandTeatimony:Bfarch1993

workloads and tight budgets, SSA should continue to explore ways to refine its continuing disability review process and increase reviews beyond current levels.

Social Security: SSA Needs to Improve Service for Program Participants, by Jane L. Ross, Associate Director for Income Security Issues, before the Subcommittee on Social Security, House Committee on Ways and Means. GAOm-HRD9wi,Mar. 25(nine pages).

This testimony explores the Social Security Administration’s (SSA) efforts to improve service to the public. GAO touches on the long delays in processing claims for disability applicants and the reduction in the number of continuing disability reviews. GAO is concerned that state disability determination services’ use of overtime and other short-term initiatives may not be adequate to reduce the disability application backlogs to acceptable levels. Also, the low number of continuing disability reviews being done results in losses to the trust funds and undermines program integrity. These short-term issues must be addressed. For the long term, SSA should complete work on its service delivery plan, which outlines how the agency will provide service in the future, before it embarks on piecemeal or costly fures that freeze current processes in place.

Information Management

Defense Communications: Defense’s Program to Improve Telecommunications Management Is at Risk

GAo/IMTEc-9315, Feb. 19 (11 pages).

The Pentagon is not effectively implementing its Telecommunications Management Program, which was intended to analyze communications management shortcomings and suggest ways to overcome them. The program began with a sound strategy for achieving long-term improvements in communications management on the basis of systematic, top-down analyses and restructuring of current business processes. The Defense Department (DOD), however, has shown little commitment to the program. DOD has neither developed a clearly articulated vision of how its communications business and management practices should be conducted in the future nor clarified departmentwide communications management roles and responsibilities. Moreover, DOD has siphoned off program resources to obtain immediate cost savings by consolidating existing communications networks. By taking this short-term, “band-aid” approach,

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EeporteandTer&imony:March1993

DOD will not have the information, processes, and systems needed to solve its costly communications problems and meet the program’s goal of fundamentally improving telecommunications management.

Telecommunications: Interruptions of Telephone Service

GAO/RCED9379F-S, Mar5(35pages).

In the fall of 1991, a long-distance carrier suffered a massive outage that cut off most long-distance communications to and from New York City. Particularly disturbing was a disruption in the region’s air traffic control system, which depends on telephone lines for voice and data transmission. GAO found that more than 1,000 such outages occurred during 1990 and 1991, affecting upwards of 69 million customers. Discounting an ice storm that lasted two weeks, the average duration of the outages was 3.3 hours; about half of the outages occurred between 9 am. and 6 p.m. Local telephone companies experienced about 80 percent of these outages; they said that hardware problems, such as computer failure, and software problems, such as progr amming errors, were the main culprits. Long-distance companies said that cable cuts were the main reason for their disruptions.

Crop Insurance Program: Nationwide Computer Acquisition Is Inappropriate at This Time

GAomc-93-20, Mar. 8 (11 pages).

Uncertainties in the Federal Crop Insurance Corporation’s (FCIC) future, including the restructuring of the Agriculture Department and reforms in the crop insurance program, make FCW’S planned $62million computer acquisition a high-risk venture. By modernizing its information technology during such uncertain times, FCIC could be wasting millions of dollars on a project that will not meet its current or long-term needs. FCIC maintains that it needs the computers to meet the immediate needs of its offices and to ensure continued delivery of the crop insurance program. Yet it has neither analyzed its immediate needs nor determined which of its offices-if any-need more equipment right away. Rather than proceed with its nationwide acquisition project at this time, FCIC should identify and satisfy only its immediate technology needs until its future role and structure are clarified.

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Testimony Tax Systems Modernization: Program Status and Comments on IRS’ Portion of President’s Request for Fiscal Years 1993 Supplemental Funds, by Howard G. Rhile, Director of General Government Information Systems Issues, before the Subcommittee on Oversight, House Committee on Ways and Means. GAOm-IMTEG933, Mar. 30 (eight pages).

The Internal Revenue Service’s (IRS) antiquated information systems must be brought up to date. The agency has made progress in implementing several interim systems as part of its $23-billion Tax Systems Modernization program. Yet other interim systems now under development have experienced significant problems and delays, calling for a reevaluation of their costs and benefits. IRS has been slower than expected in building the foundation for the long-term modernization. This foundation includes planning improvements that can be effectively supported by the new technology, developing the detailed managerial and technical infrastructure necessary for success, and addressing major human resources implications of Tax Systems Modernization. Lastly, IRS’ portion of the proposed Emergency Supplemental Appropriations Act of 1993 is $148.4 million. IRS intends to spend this money primarily for computer hardware and software that it had planned to buy in fiscal year 1994.

International A ffairs Soviet Nuclear Weapons: Priorities and Costs Associated With U.S. Dismantlement Assistance

GAomsma?-is, Mar. 8 (10 pages).

The Defense Department has earmarked more than $300 million to help improve the safety and security of former Soviet nuclear weapons and materials and to prevent its proliferation. Although the Russians have ruled out direct U.S. involvement in the dismantling of Soviet bombs and warheads, the United States is seeking to help the former Soviet republics destroy missile delivery vehicles, and, in a related effort, the United States and Russia have agreed to cooperate in converting highly enriched uranium in former Soviet weapons into reactor fuel for possible sale to the United States. Despite these positive steps, significant gaps remain in the U.S. understanding of how to best deal with the legacy of the Soviet nuclear arsenal. Russia’s request for U.S. help in building a fissile material storage facility has raised questions about cost and other issues, and the United States has deferred selecting an approach for the long-term


Reporta and Testimony: March 1993

disposition of Russian plutonium until more can be learned about various technologies. Moreover, it is still too early to determine precisely how the United States would integrate converted Russian highly enriched uranhuu into U.S. reactor fuel enrichment operations. GAO summarized this report in testimony before Congress; see:

Soviet Nuclear Weapons: U.S. Efforts to Help Former Soviet Republics Secure and Destroy Weapons, by Joseph E. Kelley, Director of International Affairs Issues, before the Senate Committee on Governmental Affairs. GAO/r-NSIAD-93-5, Mar. 9 (15 pages).

Security Assistance: Excess Defense Articles for Foreign Countries

GAOMSIAD-9%lfws, Mar.23(49pageS).

Excess defense articles are items no longer needed by the U.S. armed forces that are either sold or given to foreign countries. Because the Defense Department (DOD) lacks a data management system to track transfers of these items, it is hard to determine the number and value of excess defense articles transferred to foreign countries in any fiscal year. In addition, the military services do not routinely follow DOD'S pricing directives and have sometimes understated the value of the items transferred. GAO, taking into account the unreliability of DOD data, estimates that the value of excess defense articles transferred to the seven countries in its study-Israel, Egypt, Turkey, Greece, Portugal, Morocco, and Oman-is at least $400 million so far.

Testimony Export Promotion: Governmentwide Strategy Needed for Federal Programs, by Allan I. Mendelowitz, Director of Financial Institutions and International Trade Issues, before the Subcommittee on Economic Policy, Trade and Environment, House Committee on Foreign Affairs. GAofr-axm?-7, Mar. 15 (26 pages).

Although the United States spends considerable sums on export promotion programs, this money is not allocated on the basis of any governmentwide strategy or set of priorities. Consequently, taxpayers have little assurance that funds are being targeted to industry sectors or programs with the highest potential return. This testimony focuses on (1) the need for a governmentwide export promotion strategy and the lack of coherent funding for federal export promotion programs, (2) the

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lZeports and Testimony: March 1993

fragmented delivery of export promotion services, (3) the importance of the Sport Enhancement Act of 1992, (4) the difficulties that smaller businesses have faced in accessing export promotion programs, (5) how U.S. export promotion programs compare to those of other countries, and (6) the adequacy of current funding for export promotion.

Exchange Programs: Observations on International Educational, Cultural, and Training Exchange Programs, by Joseph E. Kelley, Director of International Affairs Issues, before the Subcommittee on International Operations, House Committee on Foreign Affairs. GAOmNSIAB93-7, Mar. 23 (24 pages).

In response to congressional concerns about the proliferation of U.S. government-funded international educational, cultural, and training exchange programs, this testimony (1) provides an inventory of such programs; (2) provides information on potentially duplicative, overlapping, or fragmented programs; (3) assesses the extent of program coordination and oversight; and (4) identifies legal requirements that may be inhibiting their flexibility in responding to rapidly changing requirements. GAO discusses 16 agencies, which reported spending about $660 million for 80 exchange or training programs serving 41,000 people in fLscal year 1992.

El Salvador: Status of Reconstruction Activities One Year After the Peace Agreement, by Harold J. Johnson, Director of International Affairs Issues, before the Subcommittee on Western Hemisphere Affairs, House Committee on Foreign Affairs. GAO/r-NsIAD-X3-10, Mar. 23 (25 pages).

It has been only a little more than one year since the United Nations-sponsored peace agreement in El Salvador was signed and the reconstruction program is in its early stages, but progress toward peace and economic reconstruction has been made. The overriding problem in El Salvador is that although the international community had pledged $800 million for reconstruction, insufficient money has been forthcoming, particularly for areas like public safety and land distribution that are critical to the long-term success of the political settlement. In general, expectations for economic rehabilitation generated by the peace agreement have outpaced fiscal realities. Solutions to differences between the government and the Farabundo Marti Liberation Front on the plan’s content are being dealt with through negotiations and concessions. The end result, however, has been to expand programs to the point that the costs exceed the available or anticipated resources. Negotiated solutions were reached without regard for where the money would come from-a



natural outgrowth of well-intentioned parties making decisions about other people’s money. The United States has committed $250 million to pay for immediate and long-term reconstruction needs for a five-year period. This was essentially front loaded to allow other donors time to provide funds they pledged. The problem now is that projects’ funding requirements greatly exceed what the United States has to spend.

Justice and Law Enforcement

Testimony Immigration Issues: Making Needed Policy and Management Decisions on Immigration Issues, by Henry R. W ray, Director of Administration of Justice Issues, before the Subcommittee on Information, Justice, Transportation, and Agriculture, House Committee on Government Operations. GAo/r-ax-9348, Mar. 30 (13 pages).

Ongoing political strife and economic hardship abroad guarantee that people will continue to flee to the United States. Hence, this country faces long-term immigration issues that are both difficult and complex. Who should be permitted to enter the country legally? What should be done to stop illegal immigration? What should be done to remove illegal aliens already here? This testimony, based on GAO’S December 1992 transition-series report on justice issues (GAo/ocG8323TR), discusses needed immigration policy and management decisions and their impact on the operations of the Immigration and Naturalization Service.

National Defense Chemical and Biological Defense: U.S. Forces Are Not Adequately Equipped to Detect All Threats

GAomsm-93-2, Jan. 26 (11 pages).

At the outset of Operation Desert Storm, U.S. military forces, though well equipped to detect Iraqi chemical agents, had only limited ability to spot biological threats. Biological detection kits provided U.S. troops before the start of Operation Desert Storm could not provide advance warning of a biological attack. The kits-useful in aiding diagnosis and treatment of troops exposed to biological agents--would not have prevented casualties. Army documents suggest that, had the Iraqis used biological agents such


Reports and Testbony: March 1993

as anthrax and botulinum toxin, fatalities could have been enormous and the Army’s medical treatment system could have been overtaxed. In the past, improving the Army’s biological detection capability has been a low priority, despite warnings from the intelligence community about the spread of biological agents. In the wake of Operation Desert Storm, biological detection research now accounts for about 30 percent of total chemical and biological detection research and development funding. The Army has been slow to develop and field adequate chemical and biological detection equipment because its early research efforts have not been based on specific field requirements to defeat known enemy threats. As a result, early research efforts have tended to yield items of marginal utility, and little effort is given to developing new technology to address specific threats.

M ilitary Bases: Transfer of Pease Air Force Base Slowed by Environmental Concerns

GAo/NsIAD-%-11i~, Feb. 3 (eight pages).

This fact sheet discusses the goals and expectations of the March 1991 closure of Pease Air Force Base in New Hampshire as well as how environmental concerns and conditions have slowed redevelopment. The main goal of the Air Force and the Pease Development Authority, a state commission, was to convert the base property to civilian use as soon as possible. Meeting that goal, however, has been delayed by the presence of hazardous waste at several sites on the base. Also, because of the need to restore the facility environmentally, the costs to close Pease have risen. Finally, the revenue projections from land sales are significantly less than originally estimated.

Defense Force Management: Challenges Facing DOD as It Continues to Downsize Ita Civilian Work Force

GAom!%-um%iz8, Feb. 12 (16 pages).

GAO testified last year that although the Defense Department (DOD) provided significant transition assistance and financial separation incentives to miUary personnel, it provided much less assistance to facilitate civilian downsizing. At another congressional hearing, GAO said that some Defense managers were concerned that DOD'S reliance on hiring



freezes to reduce its civilian work force was making it hard to respond to fluctuations in work load and creating the potential for imbalances in worker skills. This report builds on these testimony by (1) reporting on the status of DOD'S civilian work force reductions, (2) contrasting DOD'S strategy for reducing the military work force with the strategy for reducing the civilian work force, and (3) providing information on DOD'S implementation of the new authorizations for separation incentive programs.

Army Acquisition: Effective Subcontractor Oversight Needed Before Longbow Apache Production

GAONWD-93-108, Feb. 22 (12 pages).

Oversight weaknesses have been a long-standing problem at the McDonnell Douglas Helicopter Company-the prime contractor for the Apache helicopter-and past efforts to correct them have fallen short. Problems with parts for the Apache have been due at least in part to McDonnell Douglas’ inattention to the work of its subcontractors. For example, McDonnell Douglas provided inaccurate airframe drawings to one subcontractor and allowed it to produce at least 646 Apaches using these drawings. McDonnell Douglas is now instituting a new plan to overcome weaknesses in quality assurance, product definition, and program management identified by the Defense Department. The data needed to analyze the effectiveness of this corrective action, however, will be unavailable before July 1993. The steps that the military and McDonnell Douglas take to improve subcontractor oversight are particularly important because McDonnell Douglas will rely on subcontractors to do much of the work under its $5 billion Longbow Apache contract. W ithout adequate improvements in its subcontractor oversight, McDonnell Douglas’ ability to deliver quality products under its Longbow contractor could be impaired.

Antiarmor Weapons Acquisition: Assessments Needed to Support Continued Need and Long-Term Affordability

GAO/NSIAD-93-49, Mar. 4 (30 pages).

Since the Soviet threat has diminished, the Pentagon has not done enough analyses of its antiarmor needs and alternative capabilities to meet


Reports and Testimony: Bkch 1993

mission needs. The Defense Department’s (DOD) acquisition regulations provide guidance for preparing the needed analyses at key milestones. Many of the systems, however, have not had a milestone review since the threat changed. Generally, the military services’ latest detailed analyses supporting the need for current acquisitions were still based on defeating Soviet and Warsaw Pact forces. Although the services use the annual budget reviews to consider threat changes and conduct informal analyses and special studies of the continued need for antiarmor acquisitions, these budget reviews do not generally include analyses that are required for major milestones. GAO'S review of analyses prepared for milestone decision points since the 1991 revision to the DOD acquisition regulations found that the services generally have not assessed whether their needs could be met by weapon systems with other missions or from other services. In addition, the services have not, as required, assessed the affordability of major acquisitions through the end of procurement. As a result, the military lacks reasonable assurances that the systems to be acquired are needed and affordable.

Abrams Tank: Efforts to Address Engine Recuperator Problems

GAOmSIAD-93-135, Mar. 5 (12 pages).

The recuperator, a component in the Ml Abrams tank’s turbine engine, transfers heat from the engine’s exhaust to its incoming air, allowing the engine to run more efficiently. The Army canceled its two alternate recuperator contracts because it foresaw no need for spare recuperators until 1995. According to Army contracting officials, the two contractors experienced a series of problems and increased contract costs in developing their alternate recuperator prototypes. These problems, however, were not cited as a factor in the cancellation of the contracts. Army officials said that although the Army does not need to buy spare recuperators, unresolved problems with the recuperator remain. The extent of the recuperator failures is unknown because the Army does not systematically collect field data on the performance of the recuperator. Currently, the Army has no plans to collect field data on recuperator failures. Officials at Textron Lycoming acknowledge that not all of the recuperator problems have been resolved and that, moreover, these problems will become more severe with the fielding of the heavier, fully equipped MlA2 tank. In an attempt to resolve these problems, the manufacturer has submitted engineering changes to the Army for testing.

Page37 GAOIOPA-93-6

EeportamdTestimony:March1993

Army Logistics: Better Approach Needed to Identify Systemic Causes of Problem Parts

GAomsw93-88, Mar. 16 (24 pages).

The Aviation System Command’s current management approach is to react to specific part problems to minimize the effect of these problems on readiness rather than to identify the systemic causes of the problems. When problems with parts arise, this approach leaves managers with little choice but to take costly actions such as expediting procurements and deliveries on contracts. Although the Command has the basic framework in place for gathering information on the systemic causes of problems with parts, it is not collecting accurate and up-to-date data that is expressed in consistent, uniform terms. GAO found that the Command has no comprehensive initiatives to identify systemic causes of problem parts. One activity within the Command, however, has been evaluating a proactive system to avoid supply availability problems. This activity has shown potential for reducing parts’ costs and improving readiness.

National Defense Stockpile: Views on DOD'S 1992 Report to the Congress and Proposed Legislation

GAOINSLAD-93-60, Mar. 16 (39 pages).

In the wake of the diminishing threat from Eastern Europe and the former Soviet Union, a February 1992 Defense Department (DOD) report urged slashing the government’s $9 billion stockpile of strategic and critical materials by $5.7 billion. The Pentagon’s overall process for estimating stockpile requirements is of little use, however, in determining specific estimates. Material consumption ratios, used to convert estimates of economic activity into requirements for strategic and critical material, were as much as 10 years out of date, casting doubt on the validity of the 1992 report. DOD sensitivity tests showing the consequences of alternative assumptions on requirements examined only a narrow set of alternatives. Notwithstanding these shortcomings, GAO supports judicious disposal of outdated and clearly excess materials and a temporary curtailment of uncommitted purchases. DOD could dispose of obsolete materials such as vegetable tannins without endangering national security or disrupting the material markets. Caution is advised, however, in disposing of other materials because of the problems in DOD'S methodology for determining

Page33 GACh'OPA-93-3


material requirements. DOD has in its stockpile excess ferromangsnese and ferrochromium, alloys that are readily available on the world market. Although continued procurement of these alloys is uneconomical, each of the alloys has only one U.S. producer, and a sudden end to government purchases could harm these producers’ ability to compete on the commercial market. Legislation allows the purchase of alloys to continue through fiscal year 1993.

Navy Supply: Improved Backorder Management Will Reduce Material Costs

GAomsIAD93-131, Mar. 19 (12 pages).

Despite Navy validation processes designed to detect and cancel unneeded requirements, invalid backorders continue to be overlooked during validation checks because some field activities do not follow required validation procedures. When invalid backorders go unnoticed, the Navy ends up wasting money buying, repairing, transporting, and storing parts that it no longer needs. The Navy’s practice of exempting whole categories of backorders from the validation process also prevents many invalid backorders from being identified and canceled.

Acquisition Management: Waivers to Acquisition Force Training, Education, and Experience Requirements

GAomm-93-128, Mar. 30 (11 pages).

To bolster its weapons acquisition process, the Defense Department (DOD) has sought to professionalize its acquisition work force through education, training, and experience requirements. DOD officials, however, are allowed to waive specific qualification requirements for acquisition personnel. During fwcal year 1992, off&&s approved 33 waivers for program managers, general officers, and program executive officers. Two recurring reasons were cited for these waivers: the individual lacked either the program management course or the requisite acquisition experience. Yet GAO found that nearly half of the individuals receiving waivers did not satisfy either requirement. Compared to the other services, the Army issued a disproportionately higher number of waivers for senior officials. Although the law clearly intends that senior acquisition officials be highly qualified in the acquisition discipline, the waivers indicate that many of these officials did not meet previously enacted training and experience



requirements. The general practice of assigning to acquisition positions senior officers with little or no acquisition experience is at odds with the law’s intent.

Testimony Military Airlifts Status of the C-17 Development Program, by Frank C. Conahan, Assistant Comptroller General for National Security and International Affairs Programs, before the Subcommittees on Military Acquisition and on Oversight and Investigations, House Committee on Armed Services. GAo/T-NsLU%X, Mar. 10 (28 pages); and

Military Airlift: Status of the C-17 Development Program, by Louis J. Rodrigues, Director of Systems Development and Production Issues, before the Subcommittee on Legislation and National Security, House Committee on Government Operations. GAofr-wALm-8, Mar. 18 (28 pages).

Despite continuing cost escalations and delivery schedule slippages for the C-17, the Air Force remains a strong supporter of the program, raising concerns that it may be unwilling or unable to objectively evaluate the transport aircraft’s progress and shortcomings. The Air Force and the contractor-McDonnell Douglas Corp.-consistently have been too optimistic in their cost and schedule estimates and now have obligated more than $1 billion on undeflnitized contracts for future aircraft without having a legally enforceable delivery schedule. The completion of the flight test program has slipped to January 1995 due to a variety of problems, including poor Sight efficiency, low flight rates, and late delivery of flight test aircraft. GAO estimates, however, that the tlight tests will not be completed before July 1995. Moreover, several serious technical problems have surfaced over the past year or so, including range and payload deficiencies, a major wing failure in static testing, the need to redesign the flaps and slats using new materials, and problems with the landing gear. GAO expects that other technical problems will be found, potentially boosting program costs and further delaying the schedule. Overall, GAO is very concerned about the affordability of the C-17 and whether proper consideration has been given to alternatives that could offer an adequate airlift capability at less cost to the taxpayer.

Embedded Computer Systems: Status of C-17 Software, by Samuel W . Bowlin, Director of Defense and Security Information Systems Issues, before the Subcommittee on Legislation and National Security, House Committee on Government Operations. GAo!r-IMTEC-93-2, Mar. 18 (eight pages).

Pqe 40 GAOIOPA-93-6


The C-17 will be the most computerized, software-intensive transport aircraft ever built, relying on 19 different embedded computers incorporating more than 80 microprocessors and about 1.3 million lines of code. The Air Force continues to allow its prime contractor, McDonnell Douglas Corporation, to defer software development to future aircraft. Unable to develop and deliver software on time, McDonnell Douglas has postponed software development rather than slow aircraft production. Each of these deferrals has further delayed the software testing necessary to demonstrate that the C-17 is up to standards. The Air Force is experiencing embedded computer and software development problems with the C-17 in three main areas. First, some critical software functions are either still being developed or are incompletely tested. Second, McDonnell Douglas continues to have difficulty meeting reserve processing and memory capacity requirements. Lastly, McDonnell Douglas still has not developed adequate system documentation, thereby jeopardizing the Air Force’s ability to efficiently test, maintain, and upgrade C-17 computer systems.

Natural Resources Endangered Species: Potential Economic Costa of Further Protection for Columbia River Salmon

GAoilmmo3-41, Feb. 23 (34 pages).

Despite federal and regional outlays of more than $1.3 billion to improve salmon runs in the Columbia River Basin, certain salmon stocks-especially those that spawn far upstream in the Snake River and its tributaries-have reached critically low levels. As a result, the Snake River sockeye salmon was designated an endangered species in 1991, while the Snake River fall chinook and springIsummer chinook were listed as threatened species the following year. In looking into the potential economic costs and effectiveness of efforts to protect these salmon stocks, GAO found that a preliminary estimate of lost jobs due to salmon protection will be unavailable until mid-1993 at the earliest. However, preliminary estimates of the value of goods and services foregone-a measure of net economic costs-suggest that the economic costs of salmon protection may range from $2 million to as high as $211 million annually. According to the more than 300 agencies and organizations GAO contacted, no studies address how effective any of the proposed protection measures may be in increasing the number of adult salmon

Page 41 GACUOPA-93-6


returning to spawn. Past evaluation of measures to maintain and improve salmon runs either did not address the issue or were inconclusive.

Science, Space, and Technology

Space Transportation: The Content and Uses of Shuttle Cost Estimates

GAomsIAD-93115, Jan. 28 (14 pages).

The “average cost per flight” for the space shuttle, which NASA pegged at $413.5 million in fBcal year 1993, includes most costs for shuttle operations but omits about $30.2 billion spent through fiscal year 1992 to develop the shuttle as well as more than $1 billion that will be needed annually for future shuttle upgrades and for improvements like the advanced solid rocket motor. For fiscal year 1993, NASA estimated the marginal costs savings associated with deleting a single flight at $44.4 million. Marginal cost includes consumable hardware and materials, along with personnel, that can be added or removed with temporary adjustments in the ilight rate. It does not include any of the f=ed costs required if NASA is to maintain the capability to fly the shuttle eight or nine times per year. NASA says that these fixed costs account for about 90 percent of the total operations cost of a flight. Although no single criterion is generally accepted for determining which costs to include when attributing shuttle transportation costs to payloads, GAO believes that the average cost per flight would better reflect the cost of transportation for payloads that are frequent shuttle users. Because the Space Station Freedom program will be the main user of shuttle services in fiscal years 1997 to 1999, it should be allocated a proportionate share of the shuttle’s fured operating costs when calculating transportation costs during those years.

Testirnony Federally Funded Research: Controlling Inappropriate Access to Research Results, by Jim Wells, Associate Director for Energy and Science Issues, before the Subcommittee on Regulation, Business Opportunities, and Technology, House Committee on Small Business. GAom-RcEu-93-19, Mar. 11 (six pages).

GAO believes that generally the public interest is better served if appropriate controls and safeguards are in place governing who gets access to and ultimately benefits from the results of federally funded research. GAO'S May 1992 report (GAOmCED-92.104) recommended that the


EeportsandTestimony:March1993

National Institutes of Health and the National Science Foundation require their grantees to have procedures in place to effectively manage potential conflicts of interest, such as by requiring investigators and other key personnel to disclose any outside interests as part of the grant award process. GAO also believes that the government should at least be consulted about any major, multimilliondollar agreement that a university, hospital, or other nonprofit research group seeks to negotiate with a private company if that institution receives substantial federal funding and rights to resulting commercial technologies.

Tax Policy and Administration

Tax Administration: Information Returns Can Improve Reporting of Forgiven Debts

GAO/GGD93-42, Feb. 17 (25 pages).

GAO discovered that when information returns were issued, taxpayers had a significantly higher level of voluntary compliance in reporting forgiven debt income and were apparently able to pay taxes on that income. Furthermore, both GAO and the Internal Revenue Service (IRS) found that IRS could cost effectively use the information returns to spot taxpayers who failed to comply. GAO believes that Congress should amend the tax code to extend formal information reporting to the Federal Deposit Insurance Corporation (FDIC) and the Resolution Trust Corporation (RTC). This move would significantly boost tax revenues even if future forgiven debt falls short of the 1990 level-more than $10 billion. It would also ensure that such reporting conforms to the law protecting consumers from privacy invasions and unwarranted government intrusions. If FLXC and RTC information reporting on forgiven debt proves to be cost-effective, Congress might consider extending this practice to other agencies. Otherwise, taxpayers with debts forgiven by FLX or RTC will be subject to more IRS scrutiny than those with debts forgiven by other institutions. GAO found, for example, that private lending institutions forgive much higher amounts of debt than FDIC.

Tax Administration: Delayed Tax Deposits Continue to Cause Lost Interest for the Government

GAOIGGD-93-64, Mar. 22 (18 pages).

Page43 GAO/OPA-93-6

ReportaandTestiony:March1993

The Internal Revenue Service (IRS) must identify the best revenue-enhancing way to process the heavy volume of tax payments sent to its service centers around the April 15 filing deadline. The government is now losing substantial interest earnings because of the extended time it takes to process those payments. IRS is considering having taxpayers send their payments directly to lock boxes, removing the service centers from the process entirely. Yet even if various issues surrounding this new cash management strategy are resolved, the strategy will not be implemented before 1996. In the interim, IRS needs to weigh various options to hasten deposits and boost interest earnings. Adding the equipment and people needed to remove the processing bottlenecks might not prove cost-effective because these additional resources would only be needed for a few days during the filing season. A preferable alternative, in GAO'S view, would be to streamline IRS procedures so that available resources can be targeted to identifying and processing the largest payments. IRS’ National Office needs to lead the service centers in resolving this problem.

Tax Policy and Administration: 1992 Annual Report on GAO'S Tax-Related Work

GAO/GGB9%668, Mar. 31(124 pages).

This report summarizes GAO'S work in the tax area during fiscal year 1992. It discusses actions taken on GAO'S recommendation as of the end of 1992, recommendations that GAO made to Congress before and during fiscal year 1992 that remain open, and assignments for which GAO was given access to tax information under the law. GAO'S key recommendations for tax policy and administration relate to the need for improving compliance, increasing accounts receivable collections, simplifying the tax system, improving the Tax Systems Modernization Program, strengthening management practices, and enhancing the effectiveness of tax incentives.

Testimony International Taxation: Updated Information on Transfer Pricing, by Natwar M . Gandhi, Associate Director for Tax Policy and Administration Issues, before the Senate Committee on Governmental Affairs. GAO/~-GGDW16, Mar25(29pages).

For each year from 1987 through 1990, about 72 percent of foreign-controlled corporations paid no U.S. income tax, compared to about 59 percent of U.S.-controlled corporations. The Internal Revenue Service (IRS) in 1992 proposed section 482 adjustments of at least $1 billion

Page44 GAWOPA-93-B

Reports and Testimony: Mtwch 1993

for foreign-controlled corporations and at least $3.1 billion for U.S.-controlled corporations. As of September 1992, taxpayers had protested at least $14.4 billion of proposed section 482 adjustments. IRS’ recent experience with section 482 cases has been difficult. In 1992 IF& Appeals Division sustained only 24 percent of the dollar amount of section 482 adjustments proposed by IRS examiners. In addition, IRS lost a significant section 482 issue for each of the five corporations that had a major section 482 case litigated and ruled on by a court between 1990 and 1992. The challenges of section 482 cases will remain for at least two reasons. First, the growing influence of international forces on the U.S. economy will increase the potential for underpayment of U.S. taxes through transfer pricing by multinational corporations. Second, although the new, temporary transfer pricing regulations have many promising features, they still require taxpayers and IRS examiners to collect great amounts of information and use considerable subjective judgment to compute arm’s length prices.

Earned Income Tax Credit: Effectiveness of Design and Administration, by Jennie S. Stathis, Director of Tax Policy and Administration Issues, before the Subcommittees on Select Revenue-Measures and Human Resources, House Committee on Ways and Means. GAo!r-GGn-93-20, Mar. 30 (19 pages).

In 1991, more than 13 million low-income households with children claimed more than $11 billion in earned income tax credit payments. Recent legislation raised the credit for one child, introduced a higher credit rate for families with more than one child, and provided two supplemental credits. Today, low-income workers with children have a reduced, and in some cases a negative, tax burden because of the earned income tax credit. The credit appears to provide positive work incentives for the poorest workers and negative work incentives for near-poor workers; the net effect may be a small reduction in work effort. In recent years, the Internal Revenue Service’s (IRS) administration has been made easier in some ways and more difficult in others. Although GAO does not believe that the earned income schedule is necessary, certain legislative changes could make it completely redundant. Congress should at least eliminate the interactions in the supplemental credits if not the supplemental credits themselves. Congress should also revise the rules for claiming a dependent to conform with the rules for claiming a qualifying child for earned income credit purposes. Potential recipients and IRS would then be able to determine earned income credit eligibility from the tax return itself.

Page 46


Transportation Contract Award Practices: Metropolitan Washington Airport Authority Generally Observes Competitive Principles

GAOLCED-93-63, Feb. 8 (22 pages).

The Metropolitan Washington Airport Authority’s (MWAA) procedures for awarding contracts worth more than $200,000 and concession contracts have promoted a competitive environment. The contract awards that GAO reviewed followed MWAA'S procedures and reflected a fully competitive process that was open to all interested parties, with solicitations focused on local vendors. GAO did find some practices, however, that could harm the competitive process. These practices include (1) awarding contracts under procedures that have not been publicly disclosed, (2) not clearly delineating responsibility for reviewing the appropriateness of the evaluation criteria used to rank proposals for awarding architectural and engineering contracts, and (3) extending a contract without authorization.

Aircraft Maintenance: FAA Needs to Follow Through on Plans to Ensure the Safety of Aging Aircraft

GAO/mm-9%9i, Feb. 26 (12 pages).

The precarious financial health of the airline industry portends continuing flux in both U.S. airline fleets’ mix of planes and in their strategies for operating aging aircraft. Many airlines today are constantly revising their estimated capacity needs, including plans to keep aging aircraft in the skies. GAO believes that the Federal Aviation Administration (FAA) needs a clear picture of airlines’ compliance with rules for aging aircraft. Because of the potential gravity of even one major incident involving an aging aircraft, FAA needs to know the compliance status of each of the 1,800 planes in the nation’s aging fleet. Although FAA has taken positive steps to monitor airline compliance, it has neither developed data bases on aircraft compliance or the activities of its inspectors nor completed planned inspections of aging aircraft. Better information on airlines’ compliance would allow FAA to identify the areas of highest risk, which require more of its attention. Because FAA'S large work load disperses inspection resources over many high-priority areas, GAO believes that it is essential that FAA have access to complete and accurate data with which to target resources.


EeportsandTestlmony:Msrch1993

Maritime Industry: Federal Assessments Levied on Commercial Vessels

GAomCED-9365FS, Mar. 5 (196 pages).

This fact sheet responds to congressional concerns about the total number and amount of user fees, taxes, and other charges, excluding fines and penalties, that have been levied on the commercial maritime industry. GAO identified 12 federal agencies that levied a total of 117 diverse assessments for total collections of nearly $12 billion in fiscal year 1991. The assessments were intended to generate revenue or reimburse the agency for expenses incurred in providing a service. This fact sheet discusses in detail the agencies and their assessment activities, the payors of assessments, assessment amounts and totals collected, exemptions from assessments, and proposed assessments. GAO summarized this report in testimony before Congress; see:

Transportation: Federal Assessments Levied on Commercial Maritime Industry, by John H. Anderson, Jr., Associate Director for Transportation Issues, before the Subcommittees on Coast Guard and Navigation and Merchant Marine, House Committee on Merchant Marine and Fisheries. GAO/r-RCED-9324, Mar. 25 (14 pages).

Mass Transit: Needs Projections Could Reflect Future Costs

GAOnxED-93-61, Mar. 9 (32 pages).

In making crucial policy and funding decisions on the future role of public transit, Congress needs the best information available about how states and localities intend to use transit to increase mobility, reduce traffic congestion, improve air quality, and spur economic development. Congress has received four projections of overti transit needs since 1988. Two estimates came from the Federal Transit Administration (mu) while two nonprofit associations representing state transportation and transit interests each prepared one projection. These projections varied widely-from $3 billion to $32 billion per year-because each used different cost elements and made different assumptions in calculating costs. Several factors, including legislation such as the Clean Air Act Amendments of 1990, the Americans W ith Disabilities Act, and the Energy Policy Act of 1992, could cause future transit needs to exceed all of the needs projections. FTA needs to make several short- and long-term changes

Psge47 GAO/OPA-93-6


to improve its transit needs projections. New planning requirements for state and local transit plans could become the basis for a nationwide estimate of transit needs. Although these data are not now being collected, the Department of Transportation has an opportunity to facilitate future data availability. GAO summarized this report in testimony before Congress; see:

Mass Transit: ~A’S Projections Could Better Reflect State and Local Needs. bv Kenneth M . Mead. Director of Transuortation Issues. before the Subco&ittee on Transportation, Senate Committee on Appropriations. GAO/r-RCED-93-17, Mar. 11(12 pages).

Testimony High-Speed Ground Transportation: Financing Issues, by Kenneth M . Mead, Director of Transportation Issues, before the Subcommittee on Transportation, Senate Committee on Appropriations. GAO/r-RCED-9314, Mar. 4 (21 pages); and

High-Speed Ground Transportation: F’inancial Barriers to Development, by Kenneth M . Mead, Director of Transportation Issues, before the Subcommittee on Transportation, Senate Committee on Appropriations. GAOrr-RCED-93-23, Mar. I5 (20 PZgeS).

High-speed ground transportation refers to transportation systems, such as the French TGV and the Japanese Shinkansen, capable of sustained speeds of at least 125 miles per hour. In addition, magnetic levitation technology is now being developed in Germany and Japan that could carry passengers safely and efficiently at speeds of more than 250 miles per hour. Progress toward increased speeds in the United States has been limited to improving existing Amtrak routes, especially in the Northeast Corridor, where Amtrak’s Metroliner hits speeds of 125 miles per hour in some stretches between Washington and New York. Whether to increase spending for high-speed ground transportation is an important decision that must be made at a time when cutting the federal deficit has made discretionary dollars increasingly scarce. Yet without more federal commitment, this new technology will not advance in the United States. If Congress decides to increase the federal role, it will need to weigh the merits of continued support for incremental improvements by Amtrak versus underwriting more ambitious-and riskier-projects by forging public-private partnerships. Congress will also need to decide whether to target the resources it makes available for specific high-speed ground

Psge 48 GAO/OPA-93-6

BeportsandTestimony:Msreh1993

transportation projects. A fuller understanding of the costs and benefits of specific projects wiIl require reliable data.

Air Traffic Control: Advanced Automation System Problems Need To Be Addressed, by Allen Li, Associate Director for Transportation Issues, before the Subcommittee on Aviation, House Committee on Public Works and Transportation. GAO/r-RCED-93-15, Mar. 10 (19 pages).

The Advanced Automation System, a central component in the Federal Aviation Administration’s (FAA) program to modernize the nation’s air trafiic control system, involves substantial software development, changes how air traffic controllers use their equipment, and requires FAA to convert from old to new equipment while maintaining the highest safety standards for the traveling public. Given the substantial complexity and cost of the system, GAO believes that FAA management must exercise closer supervision of IBM’s progress and address schedule and technical problems in a more timely manner. Recently announced management initiatives must be carried through. Furthermore, in light of problems plaguing the project during the past five years and likely changes in FAA's consolidation plan, GAO believes that FAA should decide whether the current plan for each segment of the system is the most appropriate way to meet the needs of the air traffic control system.

State of the Airline Industry: Strategies for Addressing Financial and Competition Problems, by Kenneth M . Mead, Director of Transportation Issues, before the Subcommittee on Transportation and Related Agencies, House Committee on Appropriations. GAO/r-RCED-9321, Mar. 10 (33 pages).

Although deregulation of the domestic airline industry has benefited U.S. consumers through lower fares and more frequent service on many routes, some iirms face serious financial problems, and the long-term competitive health of the industry could be at risk. This testimony discusses the interrelated competitive and financial problems of the industry, with a view toward protecting the interests of consumers and ensuring that U.S. airlines are positioned to compete successfully in domestic and international aviation markets. In GAO'S view, an effective strategy for reviving the ailing U.S. airline industry should include the following four key elements: improving airlines’ access to capital markets by easing restrictions on foreign investments and control; improving access to the growing international market; lowering barriers to competition; and examining airline pricing practices, especially those of bankrupt carriers.

Page49 GAO/OPA-93-6


Surface Transportation: Federal and State Efforts to Support Declining Intercity Bus Service, by John H. Anderson, Jr., Associate Director for Transportation Issues, before the Subcommittee on Surface Transportation, Senate Committee on Commerce, Science, and Transportation. GAOR-~~~~-93-16, Mar. ll(l1 pages).

Since regulatory reform of the intercity bus industry a decade ago, nearly 7,000 locations have lost bus service, most of them small towns without any other public transportation. The riders who have been losing service appear to be those least able to afford and least likely to have access to alternative transportation. Many states have provided funds to prevent further deterioration or elimination of intercity bus service. States’ efforts to expand intercity bus routes may have been facilitated by the Intermodal Surface Transportation Efficiency Act of 1991, which set aside grant funds for intercity bus needs. The Federal Transit Administration’s guidance on implementing the set-aside gives states flexibility in developing their own approaches to meeting intercity bus needs and allows states to use the funds to collect information on the effect of declining service and develop appropriate responses. Continued federal support will help states ensure the availability of intercity bus service where it is needed most.

Surface Transportation: Funding Limitations and Barriers to Cross-Modal Decision Making, by Kenneth M . Mead, Director of Transportation Issues, before the Subcommittee on Transportation, Senate Committee on Appropriations. GAO/T-RCED-93-25, Mar. 31 (18 pages).

Decisions on surface transportation investment have become increasingly complex, encompassing the deterioration of the nation’s roads, bridges, and transit systems; traffic congestion; air quality; energy efficiency; and mobility for the elderly and disabled. The Inter-modal Surface Transportation Efficiency Act of 1991 provided an unprecedented level of funding for transportation needs and gave state and local governments more flexibility in deciding how money should be distributed on highway and transit projects. This testimony focuses on the (1) current fscal realities that threaten to limit investment opportunities, (2) potential ramifications of authorizing new demonstration projects, (3) use of funding flexibility, and (4) need for improved analytic tools for making intermodal investment choices.

Page SO GAO/OPA-93-6


Veterans Affairs Veterans Disability: Information From M ilitary May Help VA Assess Claims Related to Secret Tests

GA0lrm.m9389, Feb. 18 (16 pages).

The Defense Department between 1942 and 1975 conducted at least three secret chemical experiments using military personnel as test subjects. Two of these experiments, dating to World War II, involved mustard gas. The third took place during the Cold War and examined the effects of nerve gas and psychochemicals, including LSD. Because of a lack of data, the Department of Veterans Affairs (VA) has found it difficult to decide on the validity of veterans’ claims arising from the mustard gas experiments. Few veterans could prove that their health problems were due to their participation in the mustard gas tests; until 1992, VA had approved only 13 of 145 claims for benefits. In July 1992, VA changed its adjudicating procedures for these kinds of claims. To receive compensation, veterans with health problems associated with mustard gas exposure need only show that they participated in the tests. Yet only limited information on the tests is available, including test sites, test dates, and participating military units. Moreover, what little information is available is in records scattered among many military locations. As a result, VA will continue to have difficulty deciding whether veterans’ claims are legitimate. VA’S only outreach effort to identify test participants was hampered by the limited information available on the testing programs. Only 128 veterans out of the thousands who participated could be identified in 1991 from existing information.

VA Health Care: Actions Needed to Control Major Construction Costs

GAomm-93-75, Feb. 26 (38 pages).

Between fiscal years 1985 and 1992, the Department of Veterans Affairs (VA) received nearly $4 billion to build and modernize facilities; cost overruns during this period totaled more than $224 million. Although VA has tried to strengthen its construction program, the costs of the program are still too high because (1) factors affecting demand for VA health care services, such as incomes and insurance coverage of local veterans, are not considered in determining the need for VA construction; (2) less costly alternatives to VA construction, such as joint ventures with military facilities and use of state and local resources, are given short shrift in



planning VA construction projects; and (3) projects exceed program needs, containing too many beds, too much space, or too costly designs. Also, projects increasingly receive construction funding before design development is complete and adequate cost estimates are developed. GAO believes that because of the likelihood of national health care reform, VA should consider limiting construction of additional acute care capacity until future demand for VA health care services can be determined.

VA Health Care: Selection of a Planned Medical Center in East Central Florida

GAOmRD-93-77, Mar. 1(32 pages).

The Department of Veterans Affairs’ (VA) decision to build its east central Florida medical center at the Crowntree bakes site rather than as a joint venture is, in GAO'S view, unjustified and will likely boost the government’s overall construction and operating costs. The March 1992 VA study that recommended the Crowntree bakes sites was significantly flawed and does not support VA'S decision. Moreover, the estimated cost to build the medical center has mushroomed by about $80 m illion, and projected completion has been delayed by three years. GAO supports VA'S 1991 conclusion that the North Viera site, which remains available for a joint venture, would better meet the needs of east central Florida veterans at a lower cost to the government. In addition, construction of a new VA outpatient clinic and nursing home at a site near Orlando to be donated by North Viera’s developer would create a potential for sharing arrangements with the Navy. Such arrangements could include treatment of Orlando-area veterans on a space available basis in unused acute care capacity at Orlando Naval Hospital.

Management of VA: Improved Human Resource Planning Needed to Achieve Strategic Goals

GAobmm-lo, Mar. 18 (56 pages).

The Department of Veterans Affair’s (VA) approach to managing people does not effectively support its strategic management efforts. In the dynamic environment facing it today, VA needs a collaborative and future-oriented approach to human resource management, with proactive human resource planning as its cornerstone. Human resource planning is needed to focus VA'S attention on the people dimension of its strategic


ReportssndTestimony:March1993

vision. For example, VA might well need a different mix of jobs and skills to support the shift it envisions from inpatient care to an array of services-from outpatient to extended care-needed by an aging veteran population. W ithout Department-wide execution of the fundamentals of human resource planning, VA'S goal of becoming the best-managed federal service organization will be difficult to achieve. VA needs to systematically monitor and assess external environmental trends affecting its people, thereby anticipating emerging labor force issues before they become crises. It needs to identify and address the human resource concerns of its managers, such as concerns about the effectiveness of its system of rewards and incentives. VA also needs to help line managers project human resource needs to ensure that enough people with the right skills are available when-and where-needed.

Testimony Veterans’ Health Care: Potential Effects of Health Reforms on VA Construction, by David P. Baine, Director of Federal Health Care Delivery Issues, before the Subcommittee on Hospitals and Health Care, House Committee on Veterans’ Affairs. GAO/r-HRD-93-7, Mar. 3 (10 pages).

Because it is unclear what effect reform of the nation’s health care system and VA eligibility may have on the demand for VA health care, Congress should proceed cautiously with construction of more VA health care facilities. Any national health care reform that expands insurance coverage among veterans could cut in half demand for VA-sponsored care. Reform of VA'S system for determining eligibility for health care could have a similarly dramatic effect on VA utilization, potentially boosting outpatient visits from about 22 million in fiscal year 1991 to as high as 57 million. A limitation on construction of additional VA health care facilities, however, need not interrupt the provision of health care to America’s veterans. Rather, Congress and VA should test alternative ways of delivering services that could, at least on an interim basis, provide veterans acute care services in their home communities years earlier than could be provided through new construction. Congress could consider authorizing VA to conduct such demonstration projects in areas, such as Hawaii, northern California, and east central Florida, that have unused capacity in community or military hospitals.

Veterans’ Health Care: Potential Effects of Health Financing Reforms on Demand for VA Services, by David P. Baine, Director of Fed&al Health Care Delivery Issues, before the Senate Committee on Veterans’ Affairs. GAO/r-HRD-9&i!, Mar.31 (eight pages).

Page53 GAOIOPA-93-6

ReportsandTeetimony:March1993

Demand for inpatient services at VA facilities could drop by as much as 18 percent if employers nationwide were forced either to offer health insurance for workers or pay a tax to finance nationwide coverage. Under a nationwide universal health plan, the impact could be even greater---demand for VA inpatient care could plummet by 47 percent. Yet the ultimate impact of U.S. health care or VA eligibility reforms on future demand for VA medical services will not be known for some tune. The VA health care system should be included in discussions about health care reform, and GAO is encouraged that VA is represented on the President’s task force on that subject. But GAO has a more immediate concern: if VA continues to build hospitals on the basis of current demand, the hospitals could have significant excess capacity before they even open.

Page64 GAMJPA-93-0


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SPECIAL REPORTS BUDGET AND SPENDING

lIl Abstracts of Reports and Testimony: Fiscal Year 1992 GAO/OlMC-93-2A and GAO/OlMC-93-2B (indexes), Jan. 1993.

0 Balanced Budget Requirements: State Experiences and Implications for the Federal Government GAO/AFMD-93-58BR, Mar. 26.

AGRICULTURE AND FOOD

0 Peanut Program: Changes Are Needed to Make the Program Responsive to Market Forces GAO/RCED-93-18, Feb. 8.

Testimony

Cl Budget Policy: Long-Term Implications of the Deficit GAO/T-OCG-93-6, Mar. 25.

CIVIL RIGHTS

Cl USDA Research and Extension Agencies: Missions, Structures, and Budgets GAO/RCED-93-74FS, Feb. 18.

Testimony

Cl Federal Employment: Sexual Harassment at the Department of Veterans Affairs GAO/T-GGD-93-12, Mar. 30.

q Wheat Commodity Program: Despite Reforms, Government’s involvement Remains Substantial GAO/RCED-93-30, Mar. 18.

ECONOMIC DEVELOPMENT

0 Conservation Reserve Program: Cost-Effectiveness Is Uncertain GAO/RCED-93-132, Mar. 26.

0 Disaster Relief Fund: Actions Still Needed to Prevent Recurrence of Funding Shortfall GAO/RCED-93-60, Feb. 3.

Testimony

0 Crop Insurance: Federal Program Has Been Unable to Meet Objectives of 1980 Act GAO/T-RCED-93-12, Mar. 3.

Testimony

Cl Disaster Management: Recent Disasters Demonstrate the Need to Improve the Nation’s Response Strategy GAO/T-RCED-93-13, Mar. 2.

EDUCATION

Cl Peanut Program: Changes Are Needed to Make the Program Responsive to Market Forces GAO/T-RCED-93-18, Mar. 10.

q Compensatory Education: Difficulties in Measuring Comparability of Resources Within School Districts GAO/HRD-93-37, Mar. 11

Cl Food Safety: Building a Scientific, Risk-Based Meat and Poultry Inspection System GAOTT-RCED-93-22, Mar. 16.

0 Chapter 1 Accountability: Greater Focus on Program Goals Needed GAO/HRD-93-69, Mar. 29.

Cl U.S. Department of Agriculture: Improvements Needed in Market Promotion Program GAO/T-GGD-93-17, Mar. 25.

Testimony

q Drug Education: Limited Progress in Program Evaluation GAO/T-PEMD-93-2, Mar. 31.

EMPLOYMENT

Cl Mine Safety and Health: Tampering Scandal Led to Improved Sampling Devices GAO/HRD-93-63, Feb. 25.

ENERGY

0 Nuclear Waste: Hanford Tank Waste Program Needs Cost, Schedule, and Management Changes GAO/RCED-93-99, Mar. 8.

•! Energy Security and Policy: Analysis of the Pricing of Crude Oil and Petroleum Products GAOIRCED-93-17, Mar. 19.

ENVIRONMENTAL PROTECTION

0 Hazardous Waste: Much Work Remains to Accelerate Facility Cleanups GAO/RCED-93-15, Jan. 19.

0 Environmental Protection: Implications of Using Pollution Taxes to Supplement Regulation GAO/RCED-93-13, Feb. 17.

Testimony

•! Management Issues Facing the Environmental Protection Agency GAO/r-RCED-93-26, Mar. 29.

0 Environmental Protection: EPA’s Actions to Improve Longstanding Information Management Weaknesses GAO/T-IMTEC-93-4, Mar. 29.

FINANCIAL INSTITUTIONS

Cl Government-Sponsored Enterprises: Changes in Securities Distribution Process and Use of Derivative Products GAO/GGD-93-70BR. Mar. 16.

Testimony

Cl Bank and Thrift Regulation: Concerns About Credit Availability and Regulatory Burden GAO/T-GGD-93-10, Mar. 17.

0 Resolution Trust Corporation: Funding, Organization, and Performance GAO/r-GGD-93-13, Mar. 18.

FINANCIAL MANAGEMENT

0 Financial Audit: Guaranteed Student Loan Program’s Internal Controls and Structure Need Improvement GAO/AFMD-93-20, Mar. 16.

G Financial Management: Navy Industrial Fund Has Not Recovered Costs GAOIAFMD-93-18, Mar. 23.

GOVERNMENT OPERATIONS

0 Census Reform: Early Outreach and Decisions Needed on Race and Ethnic Questions GAO/GGD-93-36, Jan. 28.

0 GSA Procurement: Public Utilities’ Plans for Small and Small Disadvantaged Subcontractors GAO/GGD-93-44, Jan. 29.

Cl Paperwork Reduction: Agency Responses to Recent Court Decisions GAO/PEMD-93-5, Feb. 3.

Cl Whistleblower Protection: Agencies’ Implementation of the Whistleblower Statutes Has Been Mixed GAO/GGD-93-66, Mar. 5.

Cl Gross Domestic Product: No Evidence of Manipulation in First Quarter 1991 Estimates GAO/GGD-93-58, Mar. 10.

GAO Form 468 (Rev. 9/92) continued

Cl l-Dollar Coin: Reintroduction Could Save Millions if Properly Managed GAO/GGD-93-56, Mar. 11.

0 The Public Service: Issues Confronting the Federal Civilian Workforce GAO/GGD-93-53, Mar. 16.

Cl UNESCO: Improvements in Management Practices GAO/NSIAD-93-159, Mar. 23.

Cl District’s Workforce: Annual Report Required by the District of Columbia Retirement Reform Act GAOIGGD-93-81, Mar. 31.

Testimony

Cl Decennial Census: Fundamental Reform Jeopardized by Lack of Progress GAO/T-GGD-93-6, Mar. 2.

Cl Federal Employment: Impact of President’s Economic Plan on Federal Employees’ Pay and Benefits GAOTT-GGD-93-8, Mar. 10.

q Improving Government: Need to Reexamine Organization and Performance GAO/T-GGD-93-9, Mar. 11.

0 Federal Organizations: Structure and Oversight of Operational Boards and Commissions GAO/T-GGD-93-11, Mar. 16.

0 Improving Government: Measuring Performance and Acting on Proposals for Change GAO/T-GGD-93-14, Mar. 23.

Cl Postal Service: Restructuring, Automation, and Ratemaking GAO/r-GGD-93-15, Mar. 25.

Cl District of Columbia: The Federal Payment Formula GAO/T-AFMD-93-3, Mar. 31.

Cl Whistleblower Protection: Employees’ Awareness and Impact of the Whistleblower Protection Act of 1989 GAO/T-GGD-93-19, Mar. 31,

HEALTH

0 Medicaid: States Turn to Managed Care to Improve Access and Control Costs GAO/HRD-93-46, Mar. 17.

0 Medicaid: Outpatient Drug Costs and Reimbursements for Selected Pharmacies in Illinois and Maryland GAO/HRD-93-55FS, Mar. 18.

0 Medicaid: The Texas Disproportionate Share Program Favors Public Hospitals GAO/HRD-93-86, Mar 30.

Cl Health Care: Rochester’s Community Approach Yields Better Access, Lower Costs GAOIHRD-93-44, Jan. 29.

0 Needle Exchange Programs: Research Suggests Promise as an AIDS Prevention Strategy GAO/HRD-93-60, Mar. 23.

Testimony

Cl Health Insurance: Remedies Needed to Reduce Losses From Fraud and Abuse GAO/T-HRD-93-8, Mar. 8.

Cl Medicaid: States Turn to Managed Care to Improve Access and Control Costs GAO/T-HRD-93-10, Mar. 17.

INCOME SECURITY

Cl Social Security: Telephone Busy Signal Rates at Local SSA Field Offices GAOIHRD-93-49, Mar. 4.

Cl Social Security: IRS Tax Identity Data Can Help Improve SSA Earnings Records GAO/HRD-93-42, Mar. 29.

Cl Income Security: Reports Issued during 1990-92 and Testimonies Delivered in 1992 GAO/HRD-93-80, Mar. 1993.

Testimony

0 Social Security: SSA’s Processing of Continuing Disability Reviews GAO/T-HRD-93-9, Mar. 9.

Cl Social Security: SSA Needs to Improve Service for Program Participants GAO/T-HRD-93-11, Mar. 25.

INFORMATION MANAGEMENT

Cl Defense Communications: Defense’s Program to Improve Telecommunications Management Is at Risk GAO/IMTEC-93-15, Feb. 19.

q Telecommunications: Interruptions of Telephone Service GAO/RCED-93-79FS Mar. 5.

0 Crop Insurance Program: Nationwide Computer Acquisition Is Inappropriate at This Time GAO/IMTEC-93-20, Mar. 8.

Testimony

0 Tax Systems Modernization: Program Status and Comments on IRS’ Portion of President’s Request for Fiscal Years 1993 Supplemental Funds GAO/T-IMTEC-93-3, Mar. 30

INTERNATIONAL AFFAIRS

0 Soviet Nuclear Weapons: Priorities and Costs Associated With US. Dismantlement Assistance GAO/NSIAD-93-154, Mar. 8.

0 Security Assistance: Excess Defense Articles for Foreign Countries GAO/NSIAD-93-164FS, Mar. 23.

Testimony

Cl Soviet Nuclear Weapons: U.S. Efforts to Help Former Soviet Republics Secure and Destroy Weapons GAO/T-NSIAD-93-5, Mar. 9.

0 Export Promotion: Governmentwide Strategy Needed for Federal Programs GAO/T-GGD-93-7, Mar. 15.

0 Exchange Programs: Observations on International Educational, Cultural, and Training Exchange Programs GAO/r-NSIAD-93-7, Mar. 23.

Cl El Salvador: Status of Reconstruction Activities One Year After the Peace Agreement GAO/T-NSIAD-93-10, Mar. 23.

JUSTICE AND LAW ENFORCEMENT

Testimony

Cl Immigration Issues: Making Needed Policy and Management Decisions on Immigration Issues GAO/T-GGD-93-18, Mar. 30.

NATIONAL DEFENSE

Cl Chemical and Biological Defense: U.S. Forces Are Not Adequately Equipped to Detect All Threats GAO/NSIAD-93-2, Jan. 26.

0 Military Bases: Transfer of Pease Air Force Base Slowed by Environmental Concerns GAO/NSIAD-93-11 lFS, Feb. 3.

0 Defense Force Management: Challenges Facing DOD As It Continues to Downsize Its Civilian Work Force GAO/NSIAD-93-123, Feb. 12.

Cl Army Acquisition: Effective Subcontractor Oversight Needed Before Longbow Apache Production GAO/NSIAD-93-108, Feb. 22.

Cl Antiarmor Weapons Acquisition: Assessments Needed to Support Continued Need and Long-Term Affordability GAO/NSIAD-93-49, Mar. 4.

0 Abrams Tank: Efforts to Address Engine Recuperator Problems GAO/NSIAD-93-135, Mar. 5.

Cl Army Logistics: Better Approach Needed to Identify Systemic Causes of Problem Parts GAO/NSIAD-93-86, Mar. 16.

•i National Defense Stockpile: Views on DOD’s 1992 Report to the Congress and Proposed Legislation GAO/NSIAD-93-60, Mar. 16.

Cl Navy Supply: Improved Backorder Management Will Reduce Material Costs GAO/NSIAD-93-131, Mar. 19.

continued

q Acquisition Management: Waivers to Acquisition Force Training, Education, and Experience Requirements GAO/NSIAD-93-128, Mar. 30.

Cl Earned Income Tax Credit: Effectiveness of Design and Administration GAO/T-GGD-93-20, Mar. 30.

TRANSPORTATION

0 Surface Transportation: Funding Limitations and Barriers to Cross-Modal Decision Making GAO/T-RCED-93-25, Mar. 31.

Testimony

•j Military Airlift: Status of the C-l 7 Development Program GAO/T-NSIAD-93-6, Mar. 10, and GAO/T-NSIAD-93-8, Mar. 18.

Cl Embedded Computer Systems: Status of C-17 Software GAO/T-IMTEC-93-2, Mar. 18.

NATURAL RESOURCES

Cl Endangered Species: Potential Economic Costs of Further Protection for Columbia River Salmon GAO/RCED-93-41, Feb. 23.

SCIENCE, SPACE, AND TECHNOLOGY

0 Space Transportation: The Content and Uses of Shuttle Cost Estimates GAO/NSIAD-93-115, Jan. 28.

Testimony

0 Federally Funded Research: Controlling Inappropriate Access to Research Results GAO/T-RCED-93-19, Mar. 11.

TAX POLICY AND ADMINISTRATION

q Tax Administration: Information Returns Can Improve Reporting of Forgiven Debts GAO/GGD-93-42, Feb. 17.

0 Tax Administration: Delayed Tax Deposits Continue to Cause Lost Interest for the Government GAO/GGD-93-64, Mar. 22.

•i Tax Policy and Administration: 1992 Annual Report on GAO’s Tax-Related Work GAO/GGD-93-68, Mar. 31.

Testimony

Cl International Taxation: Updated Information on Transfer Pricing GAO/T-GGD-93-16, Mar. 25.

0 Contract Award Practices: Metropolitan Washington Airport Authority Generally Observes Competitive Principles GAO/RCED-93-63, Feb. 8.

VETERANS AFFAIRS

Cl Veterans Disability: Information From Military May Help VA Assess Claims Related to Secret Tests GAO/NSIAD-93-89, Feb. 18.

0 Aircraft Maintenance: FAA Needs to Follow Through on Plans to Ensure the Safety of Aging Aircraft GAO/RCED-93-91, Feb. 26.

Cl VA Health Care: Actions Needed to Control Major Construction Costs GAO/HRD-93-75, Feb. 26.

0 Maritime Industry: Federal Assessments Levied on Commercial Vessels GAO/RCED-93-65F.S Mar. 5.

Cl VA Health Care: Selection of a Planned Medical Center in East Central Florida GAOIHRD-93-77, Mar. 1.

0 Mass Transit: Needs Projections Could Reflect Future Costs GAO/RCED-93-61, Mar. 9.

Cl Management of VA: Improved Human Resource Planning Needed to Achieve Strategic Goals GAO/HRD-93-10, Mar. 18.

Testimony Testimony

0 High Speed Ground Transportation: Financing Issues GAO/T-RCED-93-14, Mar. 4, and GAO/T-RCED-93-23, Mar. 15.

Cl Veterans’ Health Care: Potential Effects of Health Reforms on VA Construction GAO/T-HRD-93-7, Mar. 3.

0 Air Traffic Control: Advanced Automation System Problems Need To Be Addressed GAO/T-RCED-93-15, Mar. 10.

0 Veterans’ Health Care: Potential Effects of Health Financing Reforms on Demand for VA Services GAOiT-HRD-93-12, Mar. 31.

0 State of the Airline Industry: Strategies for Addressing Financial and Competition Problems GAO/T-RCED-93-21, Mar. IO.

0 Surface Transportation: Federal and State Efforts to Support Declining Intercity Bus Service GAO/T-RCED-93-16, Mar. 11.

•i Mass Transit: FTA’s Projections Could Better Reflect State and Local Needs GAO/T-RCED-93-17, Mar. 11.

0 Transportation: Federal Assessments Levied on Commercial Maritime Industry GAO/T-RCED-93-24, Mar. 25.


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